BM: 2-1 Types of Business Ownership

What is the legal responsibility of an individual (or entity) for business actions, debts, and obligations?

• Unlimited liability

• Limited liability

• Unlimited responsibility

• Limited responsibility

What is the main advantage of a Sole Proprietorship?

• Shared decision-making

• Requires registration with the Secretary of State

• Easy to get started

• Limited liability

What is the main difference between a General Partnership and a Limited Partnership?

• Liability

• Control

• Decision-making power

• Operational participation

What is the main characteristic of a Limited Liability Company (LLC)?

• Tax liability passed directly through to each owner

• Unlimited liability

• Owners are called stockholders

• Cannot raise money by selling units

What is the main advantage of incorporating as a C Corp?

• No double taxation

• Unlimited stockholders

• Limited regulation

• Public reporting of financial information

What is the main purpose of a Benefit Corporation (B Corp)?

• Avoiding double taxation

• Reporting annually to the public their overall performance

• Maximizing shareholder value

• Selling unlimited shares to the general public

What is the main difference between an S Corp and a C Corp?

• Number of stockholders

• Tax liability

• Regulation by the government

• Types of owners

What is the legal entity that is separate from its owners and controlled by a board of directors?

• Limited Liability Company

• Corporation

• Partnership

• Sole Proprietorship

What is the term for a legally binding document that outlines the rights, responsibilities, and obligations of the individuals involved in a partnership?

• Articles of Incorporation

• Limited liability

• Charter

• Partnership agreement

What is the main disadvantage of a General Partnership?

• Limited liability

• No decision-making power

• Unlimited liability

• Limited regulation