Chapter 25

In a sole proprietorship, how many people are responsible for the business?

• one

• one or more

• at least two

• any number

Which of the following is not an advantage of a sole proprietorship?

• no partners to split profits with

• unlimited liability

• inexpensive to set up

• business income and costs are reported on the owner's personal tax return

Which type of business legal structure has "double taxation?"

• nonprofit corporation

• sole proprietorship

• limited liability company

• C corporation

Which type of business legal structure exposes its owner(s) to unlimited liability for its owners?

• sole proprietorship

• C corporation

• nonprofit corporation

• all of the above

Which advantage(s) does a general partnership have over a sole proprietorship?

• more than one person for financial backing

• it has a lower tax rate

• limited liability

• all of the above

What disadvantage(s) does a general partnership have over a sole proprietorship?

• partners may have trouble agreeing on policies

• each partner is responsible for the business actions of the others

• profit is split between the partners

• all of the above

A nonprofit corporation

• uses its profits to help society

• is also called a cooperative

• does not protect its owners from liability

• all of the above

Sole proprietorships with employees are required to have

• tax I.D. number

• tax I.D. number and EIN

• EIN

• none of the above

Even if you are best friends with your business partner, you should always

• register a sole proprietorship

• incorporate

• use a partnership agreement

• none of the above

The owners of a cooperative business are its members who

• are employed by the business

• use the services of the business

• buy the goods of the business

• all of the above