Business Organization Structures and Responsibilities

The video explains the three main forms of business organization: sole proprietorship, partnership, and corporation. It covers the legal status, liabilities, ownership, and management of each type. Sole proprietorships are simple but have unlimited liabilities. Partnerships involve multiple owners sharing responsibilities and liabilities. Corporations are separate legal entities with limited liabilities for owners, allowing for easier capital raising and continuity. Each form has its own advantages and disadvantages, which are discussed in detail.

Which of the following is NOT a common form of business organization?

• Partnership

• Sole Proprietorship

• Corporation

• Franchise

What is a key characteristic of a sole proprietorship?

• Multiple owners

• Limited liability

• Separate legal entity

• Unlimited liability

In a sole proprietorship, who is responsible for the business's debts?

• The shareholders

• The board of directors

• The sole proprietor

• The government

What happens to a sole proprietorship if the owner passes away?

• It is terminated

• It is automatically transferred to the owner's family

• It becomes a partnership

• It continues under new management

How many partners are required at minimum to form a partnership?

• Two

• Four

• One

• Three

Which type of partnership allows some partners to have limited liability?

• General Partnership

• Limited Partnership

• Corporation

• Sole Proprietorship

What is a major disadvantage of a partnership?

• High organizational cost

• Easy transferability

• Unlimited liability

• Limited liability

What distinguishes a corporation from a sole proprietorship and partnership?

• Single owner

• Unlimited liability

• No legal status

• Separate legal entity

What is the maximum number of owners allowed in a private corporation?

• Unlimited

• 100

• 50

• 20

Which of the following is a disadvantage of forming a corporation?

• Limited liability

• Ease of raising capital

• High organizational cost

• Perpetual succession