Lesson 1.3.1

1.3.1 Legal Structures Quiz: NCFE Business & Enterprise, Unit 1

20 questions · by Revision Ninja

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This free Legal Structures quiz has 20 multiple choice questions for the NCFE Level 1/2 Technical Award in Business and Enterprise (NCFE Business & Enterprise), Unit 1: Entrepreneurship. It covers lesson 1.3.1, Legal Structures, one of the ready-made revision sets written with Revision Ninja and organised by unit on Qwiz Rush.

Use it as a starter, a plenary or an end-of-unit check: host it live on the board and students join with a game code on their own devices — no student accounts and nothing to install — or set it for independent revision with Free Play, where each student works through the questions alone.

Every question runs on a 20-second countdown and the fastest correct answers score the most. All the questions and their choices are listed below so you can see what the quiz covers; the answers are revealed in the game. Want to change something? Make your own copy and edit it in your library.

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The 20 questions

  1. Jaz owns and runs a mobile nail bar by herself. What type of business ownership is this?

    • Partnership
    • Sole trader
    • Private limited company
    • Franchise

  2. Ben is a sole trader whose shop cannot pay an £8,000 debt. What is Ben's legal position?

    • He must sell the shop, but his savings are protected
    • He has unlimited liability, so personal assets are at risk
    • The debt is owed by the shop, a separate legal body
    • He has limited liability, so he loses at most his stake

  3. Two friends are setting up a business together. What does a deed of partnership do?

    • Reports the partnership's yearly profits to HMRC
    • Gives the partners limited liability for business debts
    • Registers the partnership as a separate legal company
    • Sets out profit shares, roles and how disputes are settled

  4. A burger chain lets other people open branches using its brand and menu. Which statement about this franchise is correct?

    • The franchisor pays fees to trade under the franchisee's brand
    • The franchisee and the franchisor jointly own the brand
    • The franchisor employs the branch staff and keeps each branch's profit
    • The franchisee pays fees to trade under the franchisor's brand

  5. Who legally owns a private limited company (Ltd)?

    • The directors, who are appointed to run it day to day
    • The partners, in the profit shares fixed by their deed
    • Shareholders, who each own a share of the business
    • The public, who can buy its shares on the stock market

  6. Why might a fast-growing firm decide to become a PLC?

    • It gains limited liability, which an Ltd does not have
    • It can raise large sums by selling shares to the public
    • It pays a lower rate of corporation tax than an Ltd
    • Its founders keep tighter control of the decisions

  7. Staff at a bakery jointly own the business and share its profits. Which type of co-operative is this?

    • Worker co-operative
    • Housing co-operative
    • Producer co-operative
    • Consumer co-operative

  8. What is a common drawback of running a business as a co-operative?

    • Decision-making is slow and members may lack expertise
    • Members are paid a fixed wage rather than a share of the surplus
    • Profits must be paid to outside shareholders first
    • Members carry unlimited liability for the co-op's unpaid debts

  9. A registered co-operative cannot pay its debts. What is its members' liability?

    • They have limited liability, like company shareholders
    • Members must each pay an equal share of the debt
    • They have unlimited liability, as a co-op is not a separate legal body
    • Just the elected committee is liable for the debts

  10. Which of these is an advantage of running a business as a sole trader?

    • Shares can be sold to investors to raise extra capital
    • The owner's savings are protected from business debts
    • Start-up costs can be shared with several other owners
    • It is quick and cheap to start, with little paperwork

  11. Which of these is an advantage of setting up as a sole trader rather than a private limited company?

    • The owner keeps the profit and is in charge
    • The owner's liability for debts is limited
    • The owner can sell shares to investors to raise capital
    • The business carries on if the owner dies

  12. Why is being a sole trader risky if the business builds up debts it cannot pay?

    • The owner's debts are written off once the business closes
    • The owner's partners are jointly liable for the whole debt
    • The owner's losses stop at the sum they invested
    • The owner's personal assets can be sold to repay them

  13. How is ownership arranged in an ordinary partnership?

    • Members of the local community own it
    • Two to twenty people own and run it together
    • Shareholders own it and directors run it
    • One person owns it and keeps the profit

  14. Two friends open a bakery together. What would their deed of partnership normally set out?

    • The prices the bakery will charge for its bread
    • How profits and decisions are shared between them
    • The hours their staff are contracted to work
    • The sales targets the bakery must hit each week

  15. How does a franchise arrangement work?

    • The franchisee pays a fee to use the franchisor's brand
    • The franchisor pays the franchisee to use their shop name
    • The franchisee sets its own menu, prices and shop layout
    • The franchisee buys the brand outright and can resell it

  16. Ravi opens a burger bar as a franchisee of a national chain. Which of these is a drawback for him?

    • He must build the brand's name from scratch
    • The chain gives him no training or support
    • He pays the chain a share of his takings
    • He cannot employ any staff of his own

  17. Nia turns her shop into a private limited company. What does limited liability mean if the company fails?

    • She loses the money she put in, not her home
    • The company's debts are written off by the bank
    • She must sell personal assets to clear the debts
    • She is not liable for anything the company owes

  18. A private limited company keeps some profit and pays the rest to its owners. What is that payment called?

    • A wage paid to the company's employees
    • A dividend paid to the shareholders
    • Interest paid to the company's lenders
    • A bonus paid to the company directors

  19. What can a public limited company (PLC) do that a private limited company (Ltd) cannot?

    • Sell shares privately to family and friends of the owners
    • Pay its shareholders a dividend from profit
    • Sell its shares to anyone on the stock exchange
    • Give its owners limited liability for debts

  20. How is a co-operative owned and controlled?

    • By a single owner who takes the decisions
    • By its members, who each hold one equal vote
    • By shareholders, whose votes match their shares
    • By the council on behalf of local taxpayers