Business Organizations

1. What type of business organization is owned and operated by one individual?

• Corporation
• Partnership
• Sole Proprietorship
• Nonprofit Organization

2. In which form of business organization do the owners have unlimited personal liability for the debts and obligations of the business?

• Corporation
• Partnership
• Sole Proprietorship
• Limited Liability Company (LLC)

3. If a business owner wants to have full control over all decisions, which business structure should they choose?

• Corporation
• Partnership
• Sole Proprietorship
• Cooperative

4. How are profits taxed in a sole proprietorship?

• As corporate income
• As personal income of the owner (Single Income Tax)

• No taxes are paid on profits
• Profits are not taxed

5. In the event of the death of an owner, what typically happens to a sole proprietorship?

• It continues to operate indefinitely.
• It is automatically transferred to the owner's heirs.
• It is dissolved unless there's a successor.
• It becomes a corporation.

6. Which form of business organization can continue indefinitely, regardless of changes in ownership?

• Sole Proprietorship
• Partnership
• Corporation
• Franchise

7. Who is responsible for making decisions in a corporation?

• The President
• The Shareholders directly
• The Board of Directors
• All employees collectively

8. What is a key feature of the liability of shareholders in a corporation?

• They have unlimited liability.
• They have limited liability up to the amount of their investment.
• They are personally responsible for all debts.
• They are liable for other shareholders' investments.

9. How are partnerships typically taxed?

• Profits are taxed as corporate income.
• Profits are not taxed at all.
• Profits or losses are passed through to partners and taxed as personal income.
• Partnerships are not allowed to make a profit.

10. What is one disadvantage of the corporate form of business organization with regard to taxation?

• Corporations are exempt from taxes.
• Only the shareholders are taxed on profits.
• Profits are subject to double taxation.
• Corporations receive a 100% tax rebate on profits.