1.4.2 Mark these statements t(true) or f(false) according to the information in the text. If they are false say why.

1. Sole traders have limited liability for the debts of their business.

2. A sole proprietorship is a legal entity.

3. Partners as well as shareholders are fully liable for the debts of the business.

4. As opposed to sole traders partners can raise more capital to finance their business.

5. A partnership must be dissolved if one of the partners dies.

6. Both private and public companies offer their shares to the general public.

7. The sole trader needs not only a technical expertise, but also ability in accountancy, marketing, personnel and general administration.

8. A lot of problems associated with partnerships may be overcome by forming a sole proprietorship.

9. Without accounting knowledge it is easy to see the danger signs relating to cash flow or credit control or to obtain the necessary long term capital.

10. A firm is likely to have a variety of objectives which reflect not only the interests of the shareholders but also the managers and other groups within the environment.

11. Decisions relating to the nature of the partnership business and to the day-to-day running of the business require unanimity.

12. Unlimited companies with no limit to the shareholders’ liability do not exist in the UK.

13. In practice, firms have perfect knowledge of market conditions and the situations which face them are predictable.