Podcast
Questions and Answers
What is a characteristic of a sole proprietorship?
What is a characteristic of a sole proprietorship?
- It has limited personal liability
- It has more than one owner
- It is a legal entity separate from its owner
- It has unlimited personal liability (correct)
In a partnership, what type of partner has limited liability?
In a partnership, what type of partner has limited liability?
- Dividend partner
- Limited partner (correct)
- Sole proprietor
- General partner
What is the bid price in a transaction?
What is the bid price in a transaction?
- The transaction cost
- The highest price a buyer is willing to pay (correct)
- The lowest price a seller is willing to accept
- The average price of a security
What is a characteristic of a corporation?
What is a characteristic of a corporation?
What is the bid-ask spread?
What is the bid-ask spread?
What is the primary risk associated with being a sole proprietor?
What is the primary risk associated with being a sole proprietor?
What type of partnership does not have general partners?
What type of partnership does not have general partners?
What is the main advantage of a corporation over a sole proprietorship?
What is the main advantage of a corporation over a sole proprietorship?
What is the difference between the bid price and the ask price?
What is the difference between the bid price and the ask price?
Why do corporations issue shares?
Why do corporations issue shares?
Study Notes
Business Structures
- A sole proprietorship is owned and run by one person, typically with few employees, and carries unlimited personal liability.
- In a partnership, there are multiple owners, with two types of partners: general partners who are personally liable for debt, and limited partners who have limited liability.
Limited Liability
- A limited liability partnership has no general partners, and the limited partners run the business.
Corporation
- A corporation is a legal entity separate from its owners, responsible for its own obligations.
- Corporations allow for free trade in shares and can raise capital by selling ownership.
- However, corporations are subject to double taxation.
Trading Terms
- The bid price is the highest price a customer is willing to pay to buy a security.
- The ask price is the lowest price a seller is willing to accept to sell a security.
- The bid-ask spread represents the transaction costs.
Business Structures
- A sole proprietorship is owned and run by one person, typically with few employees, and carries unlimited personal liability.
- In a partnership, there are multiple owners, with two types of partners: general partners who are personally liable for debt, and limited partners who have limited liability.
Limited Liability
- A limited liability partnership has no general partners, and the limited partners run the business.
Corporation
- A corporation is a legal entity separate from its owners, responsible for its own obligations.
- Corporations allow for free trade in shares and can raise capital by selling ownership.
- However, corporations are subject to double taxation.
Trading Terms
- The bid price is the highest price a customer is willing to pay to buy a security.
- The ask price is the lowest price a seller is willing to accept to sell a security.
- The bid-ask spread represents the transaction costs.
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Description
Learn about the different types of business structures, including sole proprietorship, partnership, limited liability partnership, and corporation, and their characteristics.
