Understanding Business - Chapter 5: How to Form a Business

What are the advantages and disadvantages of sole proprietorships?

• Easy to start, full control, but unlimited liability

• Limited liability, shared control, but complex to start

• Tax benefits, limited liability, but less control

• Full control, tax benefits, but complex to start

In a Limited Partnership, who are the partners with limited liability?

• General partners

• Limited partners

• All partners

• No partners

True or False: A Limited Liability Partnership (LLP) acts like a corporation.

• True

• False

Fill in the blank: In a Limited Liability Partnership (LLP), partners are responsible for their own acts and ________.

• Investments

• Omissions

• Decisions

• Profits

What is an advantage of partnerships?

• Unlimited liability

• Division of profits

• No special taxes

• Disagreements among partners.

Is this someone with whom you could happily share authority for all major business decisions?

Are those skills the same as yours, or do they complement your skills?

Does he or she try to solve the problem or try to defend his or her ego?

Do you share the same vision for the company's future?

What is a Conventional (C) Corporation?

• A state-chartered legal entity with authority to act and have liability separate from its owners

• A partnership between two individuals

• A sole proprietorship

• A non-profit organization.