Business Establishment and Management

What is a sole proprietorship?

• A business owned by multiple people

• A business owned by only one person

• A business owned by a corporation

• A business owned by the government

What is the main advantage of a sole proprietorship?

• Limited liability for the owner

• Access to more capital

• Simple to create and manage

• Tax benefits

What happens to a sole proprietorship if the owner dies?

• It is automatically transferred to a family member

• It continues to operate as usual

• It is dissolved and must be legally founded again

• It becomes a partnership

What is a partnership?

• A business owned by only one person

• A business owned by a corporation

• A business owned by multiple people

• A business owned by the government

What is a disadvantage of a partnership?

• Limited liability for the partners

• Difficulty in finding suitable partners

• No decision-making authority for the partners

• No tax benefits

What is a close corporation?

• A corporation with many shareholders

• A corporation with limited liability

• A corporation with a maximum of 10 members

• A corporation with no legal personality

What is an advantage of a close corporation?

• Limited liability for the members

• Access to more capital

• Simple structure of management

• No need for financial statements

What is a private company?

• A company with unlimited liability

• A company with a maximum of 50 shareholders

• A company owned by the government

• A company with no legal personality

What is a disadvantage of a private company?

• Limited liability for the shareholders

• No need for audited financial statements

• No formalities required

• Extensive prescriptions for establishing and managing the company

What is a public company?

• A company with unlimited liability

• A company with a maximum of 10 shareholders

• A company owned by the government

• A company with a minimum of seven shareholders