Forms of Business Quiz

What are some factors to consider when selecting a type of business ownership?

• tax liability

• the limits or potential liabilities of personal losses

• control in operating the business

• all the above

Every business ownership type is unique; therefore, when starting a business, it is important to:

• analyze the advantages and disadvantages of each type of business

• start out as a sole proprietorship and then decide later

• find a partner to form a general partnership

• when in doubt, create an LLC.

These items are impacted differently, based on the type of business structure chosen by a business owner:

• tariffs and limits of liability

• how the business is taxed and limits of liability

• limits of liability and products the company sells

• how the business is taxed and tariffs

What type of business has one owner, is easy to get started, where the owner has complete control, and where the owner is personally and fully responsible (liable) for any debts and any other damages that might be caused by the business.

• Limited Partnership

• Sole Proprietorship

• Limited Liability Company

• S Corp

What type of business has multiple owners, benefits from individuals combining resources, but whose liability isn't limited to the amount of their investment?

• General Partnership

• S Corp

• Limited Liability Company

• C Corp

The type of business ownership where one or more partners have decision-making abilities and unlimited liability, and, where one or more partners have no decision-making abilities and have limited liability.

• General Partnership

• C Corp

• Limited Partnership

• Limited Liability Company

This type of business ownership can sell unlimited shares of stock to the general public, which typically makes raising capital easier than for other types of businesses.

• General Partnership

• C Corp

• Private Corporation

• S Corp

This type of business ownership doesn't sell shares to the general public, and is usually owned by a small group of people, and experiences double taxation.

• Limited Liability Company

• C Corp

• Private Corporation

• S Corp

This type of business ownership sells shares to a limited amount of owners, has limited liability, and avoids double taxation as the tax liability is passed through to the individual owners.

• Limited Liability Company

• C Corp

• Limited Liability Partnership

• S Corp

This type of business ownership sells shares to the general public and reports its financial information to the public.

• Non-Profit Corporation

• S Corp

• Franchise

• C Corp