Business Structure

Question 1

What is a Sole Proprietorship?

Answer 1

A sole proprietorship is typically a business owned and operated by one individual, or a husband and wife. A sole proprietorship is not considered to be a legal entity under the law.

Question 2

What is a Partnership?

Answer 2

In a partnership, two or more individuals join together to run a business. Each of the individual partners has ownership of company assets and carry responsibility for liabilities, as well as authority in running the business.

Question 3

What are C Corporations?

Answer 3

A corporation is an entity created by law that is composed of one or more individuals united into one body under a special or corporate name.

Question 4

Sub-Chapter “S” Corporation

Answer 4

If a corporation meets the eligibility requirements, it has the option of being taxed as a partnership rather than a corporation. If it elects to take this option, it is referred to as an “S Corporation.”

Question 5

Limited Liability Company (LLC)

Answer 5

LLC is form of business entity offers legal, tax and economic advantages over the traditional forms of business ownership. The feature of limited personal liability of a corporation and taxation only at the owner level of a partnership

Question 6

What tax forms do corporations file?

Answer 6

Corporations must file annual income tax returns with the IRS. A corporation is considered a taxable entity and is required to file a Federal Form 1120.

Question 7

One pitfall of a General Partnership is that each partner is personally responsible for the debts of the business, and this debt responsibility is not limited to the percentage of ownership.

Answer 7

True

Question 8

f a corporation is eligible to be taxed as a partnership and chooses to take this option, it is referred to as ___________________.

Answer 8

“S” Corporation

Question 9

Which business organization is regulated the least by the government?

Answer 9

Sole Proprietorship

Question 10

What business organization provides the most financial protection for the owners?

Answer 10

Corporation

Question 11

Can a corporation actually be listed as the sole owner of a property?

Answer 11

Yes

Question 12

Limited Liability Companies have the ability to be passed down to family members when an owner (member) dies.

Answer 12

False

Question 13

Sub Chapter “S” Corporations can retain their status no matter how many stockholders they have.

Answer 13

False

Question 14

If you are naming the Sole Proprietorship something other than your real name, you will need to register the trade name with the:

Answer 14

MD Department of Assessments and Taxation

Question 15

A _____________ is when two or more contracting firms unite their forces to construct a particular project.

Answer 15

Joint Venture