Understanding Business Organizations

What is a sole proprietorship?

• A corporation owned by shareholders.

• A non-profit organization run by volunteers.

• A partnership between two or more individuals.

• A sole proprietorship is a business owned and operated by one individual, with personal liability for business debts.

What are the advantages of a sole proprietorship?

• Shared decision-making with partners

• Limited liability protection

• Complex regulatory requirements

• Advantages of a sole proprietorship include ease of formation, full control, simplified taxes, and retention of all profits.

What is a partnership?

• A partnership is a type of sole proprietorship.

• A partnership is a government program for small businesses.

• A partnership is a business structure where two or more individuals share ownership and management.

• A partnership is a legal agreement for personal loans.

Name one type of partnership.

• Limited partnership

• Silent partnership

• General partnership

• Equity partnership

What is a general partnership?

• A general partnership is a type of corporation with limited liability.

• A general partnership is a franchise agreement between two businesses.

• A general partnership is a sole proprietorship with multiple owners.

• A general partnership is a business arrangement where two or more individuals share ownership and management responsibilities.

What is a limited partnership?

• A limited partnership is a business structure with at least one general partner and one limited partner, where the general partner manages the business and is fully liable, while the limited partner has limited liability and does not manage.

• A limited partnership requires all partners to have equal liability.

• A limited partnership has only general partners who manage the business.

• A limited partnership is a type of corporation with shareholders.

What is a cooperative business model?

• A cooperative business model focuses on maximizing profits for shareholders.

• A cooperative business model is solely owned by a single investor.

• A cooperative business model is an organization owned and operated by its members for mutual benefit.

• A cooperative business model is a government-run organization.

How do cooperatives benefit their members?

• Limited access to resources

• Cooperatives provide lower prices, profit sharing, decision-making power, and community support.

• No influence in decision-making

• Higher prices for goods

What is a Limited Liability Company (LLC)?

• A Limited Liability Company (LLC) is a government entity that regulates businesses.

• An LLC is a partnership that requires all profits to be shared equally among members.

• A Limited Liability Company (LLC) is a business entity that protects its owners from personal liability while providing tax advantages.

• A Limited Liability Company (LLC) is a type of corporation with unlimited liability.

What are the advantages of an LLC?

• Higher corporate taxes

• The advantages of an LLC include limited liability protection, flexible management, pass-through taxation, and fewer formalities.

• Mandatory annual meetings

• Unlimited liability exposure