Review of Business Organizations

There are over 23 million of these operating in the United States, making it by far the most popular form of business entity.

(Hint: If there are lots of them, it must be easy to start!)

• Corporation

• Sole Proprietorship

• Partnership

• Monopoly

Which of the following characteristics of a corporation is this the following quote?

In 2015, the band Camper Van Beethoven and Cracker frontman David Lowery filed a lawsuit against Spotify for distributing songs without the proper licenses. The musicians asked for $150 million in damages as part of a class-action lawsuit, Billboard reported. Nearly three years later, Spotify settled and agreed to pay $112.5 million: $43.5 million would go to the artists who were directly affected, and the rest would be used to pay ongoing royalties and other fees when required, The Hollywood Reporter reported.

• Corporations are like a person.

• Corporations have unlimited liability.

• Owners of a corporation are personally responsible for a corporation's debts and claims.

• Corporations have two levels of taxation.

Reorder the following to show ownership from LEAST to GREATEST financial responsibility.

• Partnership

• Sole Proprietorship

• Corporation

Which of the following are benefits of corporations?

• ability to grow large

• ability to raise large amounts of funding

• ability to lose personal assets

• ability to save on taxes

Match the following

• business can last to perpetuity

• limited lifespan

• personal assets of owners are safe

• unlimited lifespan

• business does not have the ability to forever

• unlimited liability

• risk of losing personal assets

• limited liability

Match the following

• sole proprietorship

• has unlimited liability

• dividend

• single owner

• partnership

• partial ownership in a company

• corporation

• taxed at 2 levels

• stock or share

• amount shareholders receive for portion of company profits

"In 2021, the median amount of equity raised by companies before an IPO was 174 million U.S. dollars, up from 86 million U.S. dollars 10 years earlier."

Which characteristic of a corporation does this quote describe?

(Hint: IPO stands for "Initial Public Offering."

This is when companies sell stock to the general public.)

• ability to raise capital

• limited liability

• unlimited life

• double taxation

Choose TWO (2) reasons why someone would desire to be an owner of a partnership.

• protection from financial responsibility

• keeping all profits from operations

• ability to make quick decisions

• simple to start

What is a benefit that a sole proprietorship has over a partnership?

• unlimited liability

• limited liability

• access to more funds

• fewer conflicts

"By 2010, a partner and I had the biggest business deal in my life on the line. With one phone call, things fell apart, and the deal never happened. My contract became worthless. I lost $3 million dollars in 24 hours."

Based on the above quote, which is true?

• The partner may lose his personal assets.

• The partner's personal assets are perfectly safe.