Sole Proprietorships & Partnerships

What is a sole proprietorship?

• A sole proprietorship is a type of business structure where multiple individuals own and operate the business together.

• A sole proprietorship is a type of business structure where an individual owns and operates the business as a single entity.

• A sole proprietorship is a type of business structure where the business is owned and operated by a government agency.

• A sole proprietorship is a type of business structure where the business is owned and operated by a board of directors.

Name one characteristic of a sole proprietorship.

• Multiple owners

• Government owned

• Single ownership

• Limited liability

What are the advantages of partnerships?

• Shared resources and expertise, shared risks and responsibilities.

• Increased competition, decreased financial stability

• Decreased competition and limited market access

• One person ownership and no taxation on profits

List one disadvantage of a sole proprietorship.

• Unlimited liability

• Freedom to make decisions

• Easy to start and close

• Keep all profits

How is a sole proprietorship formed?

• An individual forms a corporation to start a business.

• An individual partners with another person to start a business.

• An individual joins an existing business as a co-owner.

• An individual starts a business on their own without any formal legal structure.

What are the rights of partners in a partnership?

• Partners in a partnership have the right to transfer their ownership interest without consent.

• Partners in a partnership have the right to share profits and losses and participate in management decisions.

• Partners in a partnership have the right to exclude other partners from decision-making.

• Partners in a partnership have the right to unlimited liability.

What do partnerships draw up to specify how profits and responsibilities will be divided?

• Profit-sharing Plan

• Responsibilities Decree

• Capital Disbursements

• Articles of Partnership

What is the main difference between a sole proprietorship and a partnership?

• Type of business structure

• Legal liability

• Tax obligations

• Number of owners

What is the liability of a sole proprietor?

• Limited

• None

• Shared

• Unlimited

What is the liability of partners in a partnership?

• Limited

• Shared

• Fixed

• Unlimited