Managing Form of Business Quiz

What is a sole proprietorship?

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

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

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

• A sole proprietorship is a type of business structure where the government owns and operates the business.

Which form of business involves a single owner who has unlimited liability?

• Corporation

• Limited liability company

• Sole proprietorship

• Partnership

What are the advantages of a partnership?

• Limited liability, increased control, reduced competition

• Shared responsibilities, shared resources, shared risks, and tax benefits.

• Higher taxes, increased risk, limited resources

• Individual responsibility, reduced risk, increased competition

In a partnership, how are profits and losses shared among the partners?

• Profits and losses are shared based on the number of years each partner has been in the partnership.

• Profits and losses are shared equally among the partners.

• Profits and losses are shared based on the amount of capital each partner has contributed.

• Profits and losses are shared based on the partnership agreement.

What is a corporation?

• A corporation is a legal entity that is separate and distinct from its owners.

• A corporation is a government agency.

• A corporation is a type of partnership.

• A corporation is a non-profit organization.

What is the main advantage of a corporation?

• Unlimited liability for shareholders

• Higher taxes for shareholders

• Less control for shareholders

• Limited liability for shareholders

What is a limited liability company (LLC)?

• A limited liability company (LLC) is a type of non-profit organization.

• A limited liability company (LLC) is a type of business structure.

• A limited liability company (LLC) is a type of government agency.

• A limited liability company (LLC) is a type of insurance.

What are the characteristics of an LLC?

• Limited liability protection, no flexibility in management and ownership structure, no taxation benefits, and more formalities and requirements compared to a corporation.

• Limited liability protection, flexibility in management and ownership structure, pass-through taxation, and fewer formalities and requirements compared to a corporation.

• Unlimited liability protection, rigid management and ownership structure, double taxation, and more formalities and requirements compared to a corporation.

• No liability protection, limited flexibility in management and ownership structure, no taxation benefits, and similar formalities and requirements as a corporation.

What is a franchise?

• A franchise is a legal and commercial relationship between the owner of a trademark, brand, or trade name and an individual or group seeking to use that identification in a business.

• A franchise is a type of sports team.

• A franchise is a form of government.

• A franchise is a type of fast food restaurant.

What are the benefits of owning a franchise?

• No need for initial investment, guaranteed success, complete independence

• Brand recognition, established business model, training and support, access to a proven product or service

• No need for business experience, low risk, quick return on investment

• Flexible working hours, unlimited vacation time, high profit margins