Economics: Micro 3

An owner of a sole Proprietorship is personality liable for all assets

• True

• False

A sole proprietorship has to share their profits with a partner

• True

• False

Unlimited liability means?

• The owner is personally liable to cover business debts and any costs the business can not cover

• The owner(s) do not have to cover all business costs personally in the case of them being sued or going into debt

• A corporation is not responsible for taking care of lawsuits

• A sole Proprietorship will have enough money and coverage to pay any and all debts

Limited Liability applies to

• Sole Proprietorships

• small business owners

• Corporations and partnerships

• Only Corporations

What is a business owned by stockholders/investors but operated by others?

• Sole Proprietorship
• Partnership
• Corporation

What is a business owned and operated by two or more people?

• Sole Proprietorship
• Partnership
• Corporation

What is ONE advantage of a sole proprietorship?

• You make ALL the decisions
• Easy to raise money
• You have to share profits

What is ONE advantage of a Corporation?

• Difficult to start
• Make all of the decisions
• Easy to raise money!

Characteristics include owned by two or more people and may be general or limited

• Sole Propriotorship
• Partnership
• Corporation

What is a disadvantage of partnerships?

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