Business Organizations & Market Structures

Limited Liability means that stockholders can lose their investment if the corporation fails.

• True
• False

A common disadvantage of a sole proprietorship is

• Difficulty starting the business
• The limited life of the business
• That the owner must share profits with others
• double taxation of earnings

In what type of business organization is each owner personally liable for all business debts, even if the debts were created by other owners?

• corporation
• partnership
• sole proprietorship
• oligopoly

The easiest form of business to start and end is a(n)

• limited liability partnership
• monopoly
• franchise
• proprietorship

One important advantage of forming a partnership is that this form of business organization gives each owner sole control over the business.

• True
• False

Disadvantages include unlimited liability, difficult to raise financial capital, difficulty attracting qualified employees, limited life

• Sole Propriotorship
• Partnership
• Corporation

Disadvantages include double taxation and more government regulation

• Sole Propriotorship
• Partnership
• Corporation

Susan, Phil, Robert, and Martina are all lawyers. After several years of working for big firms, they decide to pull their resources and start their own law practice together. The four of them will make all their business decisions together and will share all of the profits and financial risk. Their new law firm is a 

• partnership
• corporation
• sole proprietorship
• monopoly

What is a disadvantage of partnerships?

• ease of formation
• owners share responsibilities
• limited liability
• possibility of personality conflict

The Dow Jones industrial average swept past 12,000 for the first time. Investors are increasingly optimistic about corporate earnings and the economy. 
This achievement MOST likely involved which type of business organization?

• sole proprietorship
• partnership
• corporation
• conglomerate