EBME Obj. 1.02 Types of Businesses

What is an advantage of organizing a business as a partnership rather than a corporation?

• Partnerships are easier to start.

• Partnerships have limited liability.

• Partnerships need a legal charter with the state they are in

• Partnerships can issue stock to raise money.

How is a corporation different from a sole proprietorship or partnership?

• A corporation has only one or two owners.

• A corporation is usually owned by one person.

• A corporation requires a legal charter with the state.

• The owners (stockholders) have limited liability.

No paperwork (charter or agreement) is required to start which type of business?

• Partnership

• Franchise

• Sole Proprietorship

• Corporation

Which type of business allows the owner to keep all of the profit for him/herself?

• Partnership

• Franchise

• Sole Proprietorship

• Corporation

Which business type is most difficult to start out of all four types of businesses?

• Partnership

• Franchise

• Sole Proprietorship

• Corporation

How is a corporation different from a sole proprietorship?

• Sole proprietorship's require a legal charter to start.

• Sole proprietorships can be global/multinational businesses.

• Corporations are owned by only one person.

• Corporations can sell stock to raise money for the business.

What is an advantage of a franchise over a sole proprietorship?

• Parent company provides training and support to franchisee.

• Parent company will pay all of franchisee's start up cost.

• Franchises must sell only certain products or services.

• Some franchisors are strict about how the business is run.

How are a franchise and sole proprietorship alike?

• Owner keeps all profits.

• Requires a agreement/charter to start.

• Can sell stock to raise money.

• Easier to start.

Which business depends on just one person for the skills and talents to run the business?

• Sole Proprietorship

• Partnership

• Corporation

• Franchise

Which type of business has limited liability?

• Sole Proprietorship

• Partnership

• Corporation

• Franchise