LESSON 1: Let's Talk Business

Question 1

(_) is a venture or any establishment with the purpose of earning a profit or income, improving economic standards, and providing economic stability.

Answer 1

Business

Question 2

Types of Business

Answer 2

• Service Business
• Merchandising Business
• Manufacturing Business
• Financing or Investing Business

Question 3

Three basic forms of business ownership

Answer 3

• Sole proprietorship
• Partnership
• Corporation

Question 4

A business owned and operated by one person.

Answer 4

Sole proprietorship

Question 5

Approximately (_) percent of all
businesses in the Philippines are sole proprietorships.

Answer 5

40%

Question 6

PROS of Sole proprietorship

Answer 6

• Least regulated form of business ownership.
• Owner receives all profits.
• Owner makes all business decisions.
• Easy and inexpensive to create.

Question 7

CONS of Sole proprietorship

Answer 7

• The death of the owner automatically dissolves the business.
• Sole proprietorship is limited by his/her skills and abilities.
• Difficult to raise capital.
• Owner has unlimitedliability for all debts and actions of the business.

Question 8

A form of business ownership in which
two or more people share the assets, liabilities, and profits.

Answer 8

Partnership

Question 9

Types of Partnerships

Give 2 atleast

Answer 9

• General partnership
• Limited partnership

Question 10

All partners have personal liability and
take full responsibility for the management of the business.

Answer 10

General partnership

Question 11

A partnership in which the partners’ liability is
limited to their investment.

Answer 11

Limited partnership

Question 12

PROS of Partnership

Answer 12

• Easier to raise capital than in a sole proprietorship.
• Shared decision making and management responsibilities.

Question 13

CONS of Partnership

Answer 13

• Each owner has unlimited liability to partnerships’ debts.
• Some entrepreneurs fear being held legally liable for the error of their partners.
• Partnerships may lead to disagreements.

Question 14

A business that is chartered by a state and legally operates apart from its owners.

Answer 14

Corporation

Question 15

PROS of Corporation

Answer 15

• People can easily enter or leave the business
  by buying or selling their shares of stock.
• Offers owners limited liability.
• Can raise money by issuing shares of stock.
• Longer Life

Question 16

CONS of Corporation

Answer 16

• Income is taxed twice.
• Corporations are subject to more government regulations
• Start-up is costly.