Econ CH8 L1 - Forms of Business

Describe a sole proprietorship.

• A sole proprietorship is a business owned and operated by a group of individuals.
• A sole proprietorship is a business owned and operated by a government entity.
• A sole proprietorship is a business owned and operated by a non-profit organization.
• A sole proprietorship is a business owned and operated by an individual.

What is an advantage of sole proprietorships?

• Limited liability for the owner.
• Access to more capital for growth.
• Ability to share responsibilities and workload with partners.
• Complete control and decision-making power over the business.

What is a disadvantage of sole proprietorships?

• Limited control over business decisions
• Personal liability for business debts and legal issues
• Ease of obtaining financing
• Tax advantages for the business owner

What is a partnership?

• A partnership is a business structure where only one individual owns and operates a business.
• A partnership is a business structure where two or more individuals own and operate a business together, sharing profits and losses.
• A partnership is a business structure where individuals share profits but not losses.
• A partnership is a business structure where individuals own and operate separate businesses.

List 2 types of partnerships.

• General partnership, Limited partnership
• Non-profit organization
• Corporation
• Sole proprietorship

What is an advantage of a partnership?

• Limited liability for partners
• Individual decision-making and responsibilities
• Shared decision-making and shared responsibilities
• Higher tax burden for partners

What is a disadvantage of a partnership?

• Ease of formation
• Unlimited liability
• Shared decision-making
• Limited liability

Define a corporation.

• A corporation is a business owned and operated by a single individual.
• A corporation is a type of partnership where all partners have limited liability.
• A corporation is a legal entity that is separate and distinct from its owners.
• A corporation is a group of people who work together to achieve a common goal.

Why do corporations sell stocks?

• To reduce their profits and revenue.
• To decrease their market value and reputation.
• To increase their liabilities and debts.
• To raise capital or funds for their business operations and expansion.

What is a dividend?

• A dividend is a payment made by a corporation to its creditors.
• A dividend is a payment made by a corporation to its shareholders.
• A dividend is a payment made by a corporation to its employees.
• A dividend is a payment made by a corporation to its competitors.