Business Structures

Business Structures

12.16.2020 PcM Practice

Galit N.

Fill in the Blanks

Business can operate under the owner´s name or company name

Multiple Select

Two or more people share in the management, profits, and

risks of the business. Income is shared among them and is reported on personal tax

forms.

• Corporation

• Partnership

• Joint Venture

Poll

3 friends, who have worked together want to start their own firm. One is a Licensed architect and a great designer. The other two have experience in technical construction issues and are both excellent marketers. Their vision is to serve large institutional clients and grow the firm into providing service for international customers. Another goal of these owners is to protect their personal assets from potential lawsuits. What type of business organization would be best suited

for the three firm owners to meet these goals?

• C Corporation

• S Corporation

• Sole Proprietoship

• General Partnership

Multiple Choice

A _______ should be based on a formal, written agreement that describes the duties and responsibilities of each _____, how profits and losses will be divided, and how the work will be completed. It is treated like a partnership; it is not itself a legal entity independent from its members, and it cannot be sued

as a corporation can.

• Joint Venture , firm

• Partnership, partners

Multiple Select

The primary disadvantages of a ______ are the initial cost to establish the business and the continuing paperwork and formal requirements necessary to maintain it. These, however, are usually outweighed by the reduced liability and tax benefits.

• Partnership

• Corporation

• Sole Proprietorship

Multiple Select

Stockholders are owners of the business.

Directors are responsible for broad policy decisions.

Officers carry out the day to day management.

• LLP

• Corporation

• Joint Venture

• LLC

Multiple Choice

Those who invest are called members, and those who manage are called managers.

• LLC

• LLP

• Both

• None

Fill in the Blanks

An

chooses to allocate its income and losses directly to shareholders in proportion to their holdings. Shareholders report their shares of the business's income and losses on their personal federal tax returns and are assessed tax at their individual rates.

Open Ended

To qualify for __________ status, it must be a domestic company with no more than 100 shareholders; there are other restrictions as well.

Open Ended

This form of business is similar to others except that liability for malpractice is generally limited to the person responsible for the act. However, each state has its own laws regarding the burden of liability in it.