Tutorial 4 - Option for organizing business

Which form of business ownership is the easiest to establish?

• partnerships

• sole proprietorships

• S corporations

• joint ventures

• C corporations

Marco is an independent contractor who prepares architectural plans for building contractors; however, he is not an employee of any of the contractors for which he works. Marco is a(n)

• Corporate Contractor

• Sole proprietor

• limited partner

• general partner

• independent partner

What is an advantage of a sole proprietorship?

• It is heavily regulated by the government.

• It has limited liability for the debts incurred by the business.

• It is hard to dissolve.

• It is unaffected by the death or withdrawal of its owner.

• It is easy and inexpensive to form.

Beth has realized that she does not like working for others. She wants to open a business in which she will have maximum control and the least interference from government regulations. Which form of business is best suited for Beth's needs?

• a joint venture

• an S corporation

• a sole proprietorship

• a partnership

• a C corporation

Nathan is a sole proprietor. How is the income earned in his business taxed?

• Nathan is taxed twice—once for the business and once for his personal income.

• Nathan is exempt from paying any tax.

• Nathan pays one tax that includes both the business and his personal income.

• Nathan pays a business tax if the business earns a profit, if not, only his personal income is taxed.

Darlene runs an antique store in her local community. She started the business with her own money and solely manages the day-to-day operations of the business. What is true in this scenario?

• Darlene's business will be constantly regulated by federal and state laws.

• Darlene must file articles of incorporation to start her business.

• Darlene can easily dissolve the business whenever she wants.

• Darlene will have to share her profits with stockholders.

• Darlene's business will be subjected to double taxation.

Which form of business ownership has the most freedom from government regulation?

• partnership

• corporation

• limited liability company

• S corporation

• Sole Proprietorship

A ________ is an association of two or more persons who carry on as co-owners of a business for profit.

• partnership

• sole proprietorship

• C corporation

• Cooperative

• quasi-public corporation

All of the following are keys to a successful partnership EXCEPT partners must

• have different skill sets or resource contributions.

• maintain effective communication skills

• focus on customer satisfaction and product quality

• Keep profit sharing equal regardless of contribution

• maintain transparency with stakeholders

What are the two basic types of partnership?

• Single and multi

• limited and unlimited

• private and public

• individual and corporate

• general and limited