Business Structures and Their Impacts

Which of the following is an advantage of a sole proprietorship?

• Limited liability

• Easy to establish and dissolve

• Double taxation

• Complex regulatory requirements

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DOK Level 2: Skill/Concept

What is a common disadvantage of partnerships?

• Limited liability

• Shared decision-making

• Double taxation

• Unlimited liability

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DOK Level 2: Skill/Concept

Which of the following is a key component of corporate governance structures?

• Sole proprietorship

• Board of Directors

• Partnership agreement

• Franchise fee

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DOK Level 2: Skill/Concept

What is one tax benefit of a Limited Liability Company (LLC)?

• Double taxation

• Single taxation

• Higher tax rates

• Tax on gross revenue

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DOK Level 2: Skill/Concept

Which of the following best describes a franchise business model?

• A business owned by one person

• A business that licenses its brand and operations to franchisees

• A business with unlimited liability

• A business that is taxed as a corporation

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DOK Level 2: Skill/Concept

What is an essential element of a partnership agreement?

• Corporate bylaws

• How partners will share the profits

• Franchise fee

• Limited liability

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DOK Level 2: Skill/Concept

Which of the following is an advantage of a sole proprietorship?

• Complex tax filing

• Full control over business decisions

• Shared profits

• Limited liability

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DOK Level 2: Skill/Concept

What is a disadvantage of partnerships in terms of liability?

• Limited liability

• Unlimited liability

• Double taxation

• Pass-through taxation

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DOK Level 2: Skill/Concept

Which of the following is a role of the Board of Directors in a corporation?

• Day-to-day management

• Providing strategy and insight on the direction of the corporation

• Filing taxes

• Managing partnerships

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DOK Level 2: Skill/Concept

How does an LLC benefit from Single taxation?

• The LLC itself pays taxes

• Profits are taxed at the corporate level

• Profits are taxed only once at the individual level

• Profits are not taxed

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DOK Level 2: Skill/Concept