INTRODUCTION TO FINANCIAL ACCOUNTING
UNIT 1: SOLUTIONS
QUESTION 1
Sole Trader Partnership Company
If you are in business on your own, for yourself,
X
without major expansion plans
If you have other investors X X
If you know the investor/s well and trust them, and
if the business is simple with not too many assets X
over which disputes can arise
Investors with a short-term business in mind X
If some of your investors are not people but
X
organisations
If shareholding is (or will become) more complex
X
than a simple 50/50 or 60/40 split.
If you will be running a really low-risk business X X
If the business risk is slightly higher X
If you want to tender for government contracts X
If you are working on an absolute shoe-string
X X
budget
If you have a fair amount of financial resources X
QUESTION 2
2.1 Private company
2.2 Personal liability company
2.3 Sole proprietorship
2.4 Public company
2.5 Partnership
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