Legal Business Structures

What are the four major considerations when choosing a legal structure for your business?

• Market, Control, Product, Size

• Taxation, Liability, Cost, Control

• Size, Cost, Ownership, Distribution

• None of the answers are correct

What is "Pass-Through" Taxation?

• Businesses income "passes through" as Personal Income Tax

• Passing off taxes on other employees

• Taxing the corporation only

• None of the options

A Sole Proprietorship is defined as:

• A business with one customer

• a business owned and operated by one person

• A corporation operated by one or more owners

• A business owned by shareholders and operated by one person

Sole Proprietors account for what percentage of businesses in the U.S.?

• 60%

• 80%

• 10%

• 50%

A Sole Proprietorship is seen as a business treated legally as separate from its owner

• True

• False

Advantages of Sole Propietorships include:

• No Board of Directors

• Owner receives all profits

• Taxes are passed through to owners personal income taxes

• All options are correct

The two types of Partnerships include:

• Liability Partner and Owner Partner

• Finance Partner and Owner Partner

• Limited Partner and General Partner

• None of the options

A Limited Partner only invests in the business but is not actively involved in the operation

• True

• False

A Limited Partner is not involved in operations but shares:

• the risk of the business

• profits and losses in the business

• liability in the business

• All of the options are correct

C Corporations are separate legal entities (treated as if they are a person) from their owners

• True

• False