Types of Businesses

What is a sole proprietorship?

• A business owned and run by a group of people.

• A business owned and run by one person.

• A business owned by shareholders.

• A government-owned business.

What percentage of all businesses in the U.S. are sole proprietorships?

• 50%

• 73%

• 85%

• 65%

Which of the following is an advantage of sole proprietorships?

• High business taxes

• Difficult to make decisions

• Easy start-up

• Profits are shared

What does it mean by "management is all you" in the context of sole proprietorships?

• You must hire a manager to run the business.

• You share management responsibilities with partners.

• You are responsible for all management decisions.

• Management is handled by an external agency.

What is a characteristic of the profit in a sole proprietorship?

• The profits are taxed separately from personal income.

• The profits must be shared with the government.

• The profits are yours alone.

• The profits are distributed among employees.

What is a benefit of being your own boss in a sole proprietorship?

• You have to follow strict corporate policies.

• You can make decisions quickly.

• You have limited control over business operations.

• You report to a board of directors.

What is an advantage of sole proprietorships regarding business taxes?

• High business taxes

• No business taxes; all income for you

• Business taxes are deferred

• Business taxes are paid by the government

What does "easy exit" imply for sole proprietorships?

• It is difficult to close the business.

• You can easily transfer ownership to someone else.

• You can pay your bills and stop working.

• You must sell the business to exit.

What does unlimited liability mean in the context of sole proprietorships?

• You have limited financial responsibility

• You are responsible for everything

• Your liability is shared with a partner

• You are only responsible for a fixed amount of debt

Why might it be hard for sole proprietorships to borrow money?

• They have too many employees

• They have a high credit score

• They have to do everything themselves

• They have limited liability