Which business unit(s) does not have co-owners? (i) A sole trader (ii) Partnerships (iii) Companies
Question
Which business unit(s) does not have co-owners? (i) A sole trader (ii) Partnerships (iii) Companies
Solution
(i) A sole trader does not have co-owners. This is because a sole trader business is owned and run by one individual. The owner has total control and takes all the profits from the business but also bears all the losses.
(ii) Partnerships do have co-owners. In a partnership, two or more people share the ownership of the single business. They share the profits and losses, and each partner is personally liable for the debts of the partnership.
(iii) Companies do have co-owners. A company is a separate legal entity owned by shareholders. The shareholders own shares in the company, which makes them co-owners of the business. The liability of shareholders is limited to the value of their shares.
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