Business Structures

An advantage of a corporation is that

• owners pay fewer taxes than owners of other forms of business.
• the business is subject to little government regulation.
• owners have limited liability for debt.
• owners have direct and immediate control over daily management of the business.

Barry and two associates have been operating a business that is not going well. Barry is stressed out because the company is over $200,000 in debt and he knows that if it goes out of business, he and his two associates will have to pay it out of their own pockets. It sounds like Barry and his two associates have a 

• partnership.
• corporation.
• sole proprietorship.
• stock.

Mr. Simpson is liable for all the debts of his company. Mr.Simpson has which type of business organization?

• sole proprietorship
• monopoly
• perfect competition
• corporation

Ramon decided to open his own software business. He borrowed money from a bank to buy computers and office equipment, and he hired one assistant. What is one DISADVANTAGE of Ramon's type of business organization? 

• limited liability
• ease of start-up
• flexibility
• unlimited liability

Which type of business organization has the advantage of limited liability but the disadvantage of less control over business decisions?

• perfect competition
• partnership
• sole proprietorship
• corporation

The MOST LIKELY reason for an entrepreneur to start a new business is 

• to make a profit.
• to risk financial failure.
• to create a new social benefit.
• to discover a new product.

The liability that partners in a partnership have

• Unlimited

• Limited

• Legal

• Liquid

The maximum number of partners in a partnership is

• 2

• 10

• 20

• 149

A disadvantage of a sole proprietorship is unlimited liability for business debts.

• TRUE
• FALSE

One advantage of a partnership is that there are more sources of capital available than in a sole proprietorship.

• True
• False