Business Structures Test

A sole proprietorship is the easiest and least expensive business structure to set up.

• True

• False

In a partnership, all partners always share profits and losses equally.

• True

• False

A corporation is considered a separate legal entity from its owners.

• True

• False

An LLC provides limited liability protection to its owners.

• True

• False

Sole proprietors have unlimited personal liability for business debts.

• True

• False

Corporations face “double taxation” because profits are taxed at both the corporate and personal level.

• True

• False

Which business structure is owned by one individual?

• Partnership

• Corporation

• Sole Proprietorship

• LLC

Which of the following is an advantage of an LLC?

• Unlimited liability

• Limited liability and flexible management

• Easy transfer of ownership like a corporation

• Subject to double taxation

Which structure is most common among small, one-person businesses?

• Sole Proprietorship

• Partnership

• Corporation

• LLC

Which type of business is formed by filing Articles of Incorporation with the state?

• Partnership

• Corporation

• Sole Proprietorship

• LLC