1.5.4 Forms of Business

Question 1

What is a sole proprietorship?

Answer 1

A business owned and operated by a single individual.

Question 2

True or False: A corporation is a separate legal entity from its owners.

Answer 2

True

Question 3

Fill in the blank: In a partnership, profits and losses are typically _____ among partners.

Answer 3

shared

Question 4

What is the primary advantage of a limited liability company (LLC)?

Answer 4

Limited liability protection for its owners.

Question 5

Which form of business organization allows for the issuance of stock?

Answer 5

Corporation

Question 6

True or False: A general partnership offers limited liability to its partners.

Answer 6

False

Question 7

What is the main difference between a C corporation and an S corporation?

Answer 7

C corporations are taxed at the corporate level, while S corporations pass income directly to shareholders to avoid double taxation.

Question 8

Multiple Choice: Which of the following is NOT a form of business organization? A) Sole Proprietorship B) Corporation C) Non-Profit D) Partnership

Answer 8

C) Non-Profit

Question 9

What is a key characteristic of a cooperative?

Answer 9

It is owned and operated by a group of individuals for their mutual benefit.

Question 10

Fill in the blank: In a sole proprietorship, the owner has _____ responsibility for all debts and obligations of the business.

Answer 10

unlimited