PBM - Chapter 6: Understanding Business Structures

What is the simplest form of business ownership?

• Corporation

• Sole Proprietorship

• Partnership

• Limited Liability Company

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DOK Level 1: Recall

Which business structure is characterized by having shareholders?

• Sole Proprietorship

• Partnership

• Corporation

• Limited Liability Company

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DOK Level 1: Recall

What is a key advantage of a partnership over a sole proprietorship?

• Limited liability

• Easier to raise capital

• Complete control by one owner

• No need to share profits

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DOK Level 2: Skill/Concept

Which business structure provides the owners with limited liability protection?

• Sole Proprietorship

• Partnership

• Corporation

• Cooperative

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DOK Level 1: Recall

In which business structure do profits get taxed twice, once at the corporate level and again at the individual level?

• Sole Proprietorship

• Partnership

• Corporation

• Limited Liability Company

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DOK Level 2: Skill/Concept

What is a disadvantage of a sole proprietorship?

• Double taxation

• Unlimited liability

• Complex to set up

• Difficult to dissolve

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DOK Level 1: Recall

Which business structure is most suitable for a group of professionals, such as lawyers or accountants, who want to share resources and profits?

• Sole Proprietorship

• Partnership

• Corporation

• Limited Liability Company

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DOK Level 2: Skill/Concept

Evaluate the impact of unlimited liability on a sole proprietor's personal assets.

• Unlimited liability protects personal assets from business debts.

• Unlimited liability means personal assets can be used to cover business debts.

• Unlimited liability has no impact on personal assets.

• Unlimited liability only affects business assets.

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DOK Level 3: Strategic Thinking

What is the primary purpose of forming a cooperative?

• To maximize profits for shareholders

• To provide a service or benefit to its members

• To limit liability for owners

• To avoid taxes

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DOK Level 1: Recall

Which business structure is typically the easiest and least expensive to establish?

• Corporation

• Partnership

• Sole Proprietorship

• Limited Liability Company

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DOK Level 2: Skill/Concept