Chapter 6

Question 1

What are some similarities between proprietorships and partnerships?

Answer 1

• tax and liabilities are incurred by individual owners

- that are not separate legal entities

Question 2

What are the three forms of business organizations?

Answer 2

• Proprietorships
• Partnerships
• Corporations

Question 3

What are the different types of roles within partnerships?

Answer 3

• General partnerships: each owner is an agent of the partnership and has the power to enter contracts in the name of the partnership
• Limited partnerships: A limited partner contributes cash or property to the business and shares in profits and losses. The limited partner does not provide services and has no vote in management. The limited partner has limited liability
• Silent partnerships: Where a person who is partner in the firm remains unknown to the public. They cannot be active in the management of the regular business affairs of the company