8 Questions
What is a potential disadvantage of a sole proprietorship?
Limited managerial perspective
In a general partnership, what is the characteristic of the partners' authority?
Joint authority
What is a distinguishing feature of a public corporation?
Owned by shareholders
What is a potential drawback of a limited liability company (LLC)?
Possible loss of control
An MLP raises money by selling units of ______
ownership
An S corporation has the advantage of ______
limited liability
A potential drawback of a sole proprietorship is the owner's ______ liability
financial
A private corporation is owned by a few individuals and the stock is not ______
public
Study Notes
Sole Proprietorship
- A potential disadvantage of a sole proprietorship is the owner's unlimited liability.
General Partnership
- Partners have mutual authority, with each partner having the authority to bind the partnership.
Public Corporation
- A distinguishing feature of a public corporation is that it is owned by a large number of people, and its stock is publicly traded.
Limited Liability Company (LLC)
- A potential drawback of an LLC is the complexity and formalities involved in its setup and operation.
Master Limited Partnership (MLP)
- An MLP raises money by selling units of ownership to the public.
S Corporation
- An S corporation has the advantage of pass-through taxation, where the business income is only taxed at the individual level.
Private Corporation
- A private corporation is owned by a few individuals, and its stock is not publicly traded.
Test your knowledge about different forms of business ownership, including sole proprietorship and partnership. Learn about the advantages and disadvantages of each type.
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