Business Ownership Characteristics Review

What is the most common form of business ownership in the United States?

• Cooperative

• Franchise

• Limited liability partnership

• Sole proprietorship

Which type of business ownership provides limited liability to its owners?

• Sole proprietorship

• Partnership

• Non-profit organization

• Corporation or LLC

What is the main advantage of a sole proprietorship?

• Limited control over the business and shares the profits with others

• No control over the business and receives no profits

• Complete control over the business and receives all the profits

• High level of bureaucracy and slow decision-making process

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

• According to the partnership agreement or predetermined profit-sharing ratio

• Determined by the partner with the highest investment

• Equally among all partners regardless of their contribution

• Based on the number of hours worked by each partner

What is the main disadvantage of a corporation?

• Double taxation

• Ease of raising capital

• Tax benefits

• Limited liability

What type of business ownership is a combination of a corporation and a partnership?

• Cooperative

• Nonprofit organization

• Sole proprietorship

• Limited Liability Company (LLC)

What is the main advantage of a limited liability company (LLC)?

• Higher taxes for the owners

• Unlimited personal liability for the owners

• Limited personal liability for the owners

• No legal protection for the owners

In a franchise agreement, who typically provides the brand name, products, and business model to the franchisee?

• Franchisor

• Competitor

• Supplier

• Customer

What is the main disadvantage of a franchise business?

• High initial investment and ongoing fees.

• Too much control over business operations and decision-making.

• Lack of control over business operations and decision-making.

• Limited potential for growth and expansion.

Which type of business ownership requires the least amount of paperwork to set up?

• Limited liability company

• Sole proprietorship

• Corporation

• Partnership