Business Structures and Their Characteristics

Front

What is a key characteristic of a sole proprietorship?

Back

The business and the owner are legally the same entity.

Front

Which of the following is an advantage of a sole proprietorship? Easy to dissolve, No control over business decisions, High tax rates, Limited access to capital

Back

Easy to dissolve

Front

In a partnership, what is the main purpose of a partnership agreement?

Back

To outline the roles and responsibilities of each partner

Front

Which of the following entities offers its owners limited liability?
Sole Proprietorship, General Partnership, Corporation, None of the above

Back

Corporation

Front

What is a disadvantage of a sole proprietorship?

Back

Unlimited liability

Front

Which of the following best describes a partnership? A business owned by one person, A business owned by two or more persons who share profits and losses, A business with limited liability for all owners, A business that is easy to dissolve

Back

A business owned by two or more persons who share profits and losses

Front

What is a characteristic feature of a corporation?

Back

It has perpetual existence.

Front

Which of the following is NOT an advantage of a corporation? Ability to raise capital through stock, Limited liability for shareholders, Perpetual existence

Back

Simple decision-making process

Front

In a sole proprietorship, who is responsible for the debts of the business?

Back

The owner

Front

What does it mean for a partnership to have "joint and several" liability?

Back

Each partner can be held responsible for the full amount of the business's debts.