Businesses and Market Structures

Which of the following is the definition for sole proprietorship

• business investment that involves renting or leasing another successful business model
• unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States
• unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm
• form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

Which of the following is the definition for Partnership?

• business investment that involves renting or leasing another successful business model
• unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States
• unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm
• form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

Which of the following is an advantage of a sole proprietorship

• easy to start up
• Decisions do not require the approval of a co-owner, boss, or other "higher-up
• the owner can keep the profits of successful management without having to share them with other owners. 
• All the other options

Which of the following is a disadvantage of a sole proprietorship? 

• it is easy to start
• he owner is personally and fully responsible for all losses and debts of the business. If the business fails, the owner’s personal possessions may be taken away to satisfy business debts.
• requires a partner
• it is easy to raise the financial capital to start

Which of the following is an advantage of a partnership? 

• they are hard to start
• management is hard between two or more people
•  partnerships can usually attract financial capital more easily than proprietorships.
• They are inefficient. 

Which of the following is a disadvantage of a partnership? 

•  If one partner causes the firm to suffer a huge loss, each partner is fully and personally responsible for the loss.
• When a partner dies or leaves, the partnership must be dissolved and reorganized as a new partnership if the remaining partners want to stay in business.
• the potential for conflict between partners. 
• all the options are disadvantages

Which of the following is a disadvantage of a corporation?

• it is easy to raise financial capital using stocks, bonds, or loans. 
•  the double taxation of corporate profits. Profits are taxed the first time when the corporation pays income taxes. The profits are taxed a second time when shareholders pay taxes on their dividends.
• it is easy to get a charter to start a corporation. 
• Owners and shareholders have total control over what happens with the business. 

Which of the following is an advantage of a corporation?

• all other answers are advantages. 
•  the corporation provides limited liability for its owners. This means that the corporation itself, not its owners, is fully responsible for its obligations.
•  the corporation's board of directors can hire professional managers to run the firm. This means that the corporation's owners, its stockholders, can own a portion of the corporation without having to know much about the business itself.
• unlimited life, meaning that the corporation continues to exist even when shareholders sell their ownership shares of stock to someone else. Because the corporation is recognized as a separate legal entity, the name of the company stays the same, and the corporation continues to do business.

This type of business is owned by one person.

• Partnership
• Sole Proprietorship
• Corporation
• Franchise

Advantages of this business type are that the owner is their own boss and gets to keep all the profits.

• Partnership
• Sole Proprietorship
• Corporation
• Franchise