Podcast
Questions and Answers
Which of the following is an advantage of sole proprietorship?
Which of the following is an advantage of sole proprietorship?
- Legal formality and cost
- Easily created and terminated (correct)
- Unlimited liability
- Potential loss of control
A general partner has limited liability in a partnership.
A general partner has limited liability in a partnership.
False (B)
What is a partnership?
What is a partnership?
An association of two or more business partners who co-own a business for profit.
Which type of partner contributes knowledge or personal services to the partnership?
Which type of partner contributes knowledge or personal services to the partnership?
The maximum income form for business is ______.
The maximum income form for business is ______.
Which of the following is a disadvantage of a corporation?
Which of the following is a disadvantage of a corporation?
Limited partners are active participants in the management of the firm.
Limited partners are active participants in the management of the firm.
Match the following types of partners with their definitions:
Match the following types of partners with their definitions:
What is one advantage of incorporating a business?
What is one advantage of incorporating a business?
Study Notes
Ownership and Organization
- Sole Proprietorship:
- Single owner who manages the business.
- Advantages: Easy to set up and dissolve, direct owner control, all profits go to the owner, flexible, minimal regulations and taxes.
- Disadvantages: Unlimited liability, limited capital access, relies on owner's skills and abilities.
Partnership
- Definition: A business owned and run by two or more individuals.
- Partnership Agreement: Documents how the partners share assets, liabilities, and profits.
- Types of Partners:
- General Partner: Shares ownership and management, unlimited liability.
- Limited Partner: Limited financial liability, no active management role.
- Silent Partner: Not active in operations, but known publicly as partner.
- Dominant Partner: Not active, but generally known to be associated with the business.
- Capitalist Partner: Contributes money/property.
- Managing Partner: Manages operations.
- Industrial Partner: Contributes knowledge/services.
- Secret Partner: Active but undisclosed to the public.
- Nominal Partner: Not a real partner but presented as one.
Corporation
- Definition: Legal entity separate from its owners, formed by following specific legal procedures.
- Owners: Stockholders who can sell shares without affecting the business's continuity.
- Advantages: Limited liability, legal entity, easy transfer of ownership, access to capital, employee benefits.
- Disadvantages: Legal formalities and costs, time-consuming incorporation, potential loss of control by founders, taxation.
Cooperative
- Definition: A registered association of individuals with a common interest, defined by Republic Act 6938, the Cooperative Code of the Philippines.
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Description
Test your knowledge on different types of business ownership, including sole proprietorships and partnerships. Learn about their advantages, disadvantages, and the roles of various partners in a business structure. This quiz will help reinforce your understanding of how businesses are organized.
