Types of businesses Quiz

Question 1

Advantages of sole propietorship?

Answer 1

• -can close it sell it, or pass it down to their heirs at any time
• pays taxes as part of his income tax filling
• start up cost are low

Question 2

Disadvantaged of sole propietorship

Answer 2

• the owners personal liability for all debts icurred by the business
• difficulty obtaining loans

Question 3

Partnerships

Answer 3

Is a business co owned by two or more people or partners who agree on how responsibilities, profits, and losses will be divided

Question 4

Advantages of partnership

Answer 4

• Easy to open and close
• improved management with more than one owner
• increased ability to raise funds with more than one owner

Question 5

Disadvantages of a partnership

Answer 5

• unlimited liability for the actions of the other partnership obligations
• potential for conflict (debts in business)
• limited life

Question 6

Corporation

Answer 6

A business owned by individuals called shareholders or stock holders

Question 7

Advantages of corporation

Answer 7

• limited liability
• perpetual existence,even if the owner leaves the company
• enhanced credibility among suppliers and lenders
• unlimited growth potential
• certain tax advantages

Question 8

Disadvantages of a corporation

Answer 8

-requires more time and money to form
-government agencies motitor them which may add more paper work
-higher overall taxes
-

Question 9

Franchise

Answer 9

Is a business made up of semi independent businesses that all offer the same products or services

Question 10

Advantages of a franchise

Answer 10

• Association of a well established brand or name
• assistance with site selection
• assistance with design
• initial management training
• acces to finically systems

Question 11

Disadvantages of a franchise

Answer 11

• not completely independent
• Initial franchise fees
• Royalties and advertising fees

Question 12

Cooperative

Answer 12

Is a type of business operated for the shares benefit for all the owners who are also its customers

Question 13

Advantages of a cooperation

Answer 13

-inexpensive to register
-shareholders have an equal vote in general meetings
-members can be under the age of 18
-owned and controlled by its members rather than its investors
-

Question 14

Disadvantages of a cooperation

Answer 14

• may be difficult to attract potential members/shareholders whose primary interest is a financial return
• minimum of 5 members
• limited distribution of profits(surplus)
• requires continuous cooperative education

Question 15

Non profit organization

Answer 15

Is an institution that acts like a business organization, but it’s purpose is usually to benefit society not to make a profit

Question 16

Advantages of a non profit organization

Answer 16

• employee commitment

- ineristic rewards

Question 17

Disadvantages of a non profit organization

Answer 17

Limited funding and social pressure

Question 18

Sole propietorship

Answer 18

The most common type of business organization in the US.

-a business owned and managed by a single person