Paper 2 · Forms of Enterprise
A drawback of converting a partnership into a public limited company is
Athe loss of the company's separate legal identity
Ban end to the ability to raise long-term finance
Ca legal limit of twenty owners on the business
Dloss of privacy and control over the business
Explanation: Public companies must publish audited accounts and comply with company law and listing rules, so the affairs of the business become open to competitors and the press. Ownership is also spread among outside shareholders, and the original partners can be outvoted or even taken over.
Derived from ZIMSEC Business Enterprise Skills Paper 2, Specimen Paper, Q1