Economics Practice Test – Business Organisations

The liability of the sole trader is ______ (JAMB 1987) 

A. indeterminable       B. unlimited        C. transferable       D. limited

Who controls a limited liability company? (JAMB 1982) 

A. The general manager
B. The managing director
C. The owner of 51% of the shares
D. The board of directors

Which of the following is a characteristic of private limited liability company? (JAMB 1986)  

A. Its shares can be sold to the public.
B. The number of shareholders ranges from fifty to one hundred
C. All shareholders have equal powers and responsibilities
D. The number of shareholders ranges from two to fifty.

A possible factor which limits the extent of growth of a firm is the _____ (JAMB 1991)

A. existence of a monopoly
B. bureaucratic delays in decision-making
C. use of by-products
D. unwillingness to share ownership and control

Unlimited liability means ________ (JAMB 1981) 

A. the government can tax a company without limit
B. the debts of a company must be paid out of its assets
C. a company ceases to exist at the death of one of its owners
D. a firm must pay its debts from business as well as private funds