Forms of Business Ownership Review

Emma Thompson had always been passionate about photography. When a magazine editor asked her if she could provide some unique wildlife photos for an article, a business was born. Thompson is the proud owner and operator of Wild Shots Photography, which she started with no financial help from anyone. Emma Thompson is an example of a:

• sole partnership

• sole proprietorship

• limited partnership

• general proprietorship

Which type of business organization experiences the least governmental regulation?

• Joint venture

• Private corporation

• Limited partnership

• Sole proprietorship

Which form of business ownership can be dissolved with the least difficulty?

• sole proprietorship

• partnership

• limited liability company

• corporation

With the rise in demand for eco-friendly products, Lisa and Tom have started a business making reusable shopping bags. They handle all aspects of the business, sharing both the workload and the profits equally. Their business, Green Bags, is an example of a(n):

• general partnership

• limited cooperative

• S-partnership

• sole partnership

Which of the following statements about a general partnership is true?

• A general partnership is an entity separate from its owners.

• A general partnership is the most popular form of business ownership.

• The partnership agreement must be in writing to be legal.

• Partners in a general partnership co-own the company's assets.

Sarah Johnson is considering investing $10,000 in a friend's bakery business. She does not intend to participate in the daily operations and wants her liability to be limited to her investment. She should be a:

• shareholder

• silent partner

• active partner

• limited partner

What is a potential drawback of forming a partnership?

• unlimited liability

• shared decision-making

• increased capital

• simple setup

Which of the following statements about incorporation is true?

• A corporation is not subject to the laws of the state in which it is formed.

• Articles of incorporation may vary slightly from state to state.

• Corporations are taxed the same regardless of the state in which they are chartered.

• Corporations must register in each state in which they want to do business.

A corporation:

• is a taxable entity

• is subject to the laws of the state in which it was formed

• can own property

• is accurately described by all of the above

Known for its business-friendly environment and straightforward incorporation process, _____ is often referred to as the "corporate haven." A significant number of Fortune 500 companies have chosen to incorporate there.

• Nevada

• Delaware

• Texas

• New York