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Questions and Answers
What is the main liability difference between general and limited partners in a partnership?
What is the main liability difference between general and limited partners in a partnership?
What is a significant characteristic of a corporation compared to a partnership?
What is a significant characteristic of a corporation compared to a partnership?
What primarily influences the lifespan of a partnership?
What primarily influences the lifespan of a partnership?
Who elects the Board of Directors in a corporation?
Who elects the Board of Directors in a corporation?
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Which form of business organization is owned by a single individual and also faces unlimited liability for debts?
Which form of business organization is owned by a single individual and also faces unlimited liability for debts?
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What is the main difference in liability between a general partner and a limited partner in a limited partnership?
What is the main difference in liability between a general partner and a limited partner in a limited partnership?
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What happens to the life of a partnership when a general partner dies?
What happens to the life of a partnership when a general partner dies?
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Which of the following statements correctly describes corporations?
Which of the following statements correctly describes corporations?
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How do sole proprietors generally raise funds for their business?
How do sole proprietors generally raise funds for their business?
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Who is responsible for electing the Board of Directors in a corporation?
Who is responsible for electing the Board of Directors in a corporation?
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In a general partnership, what is the primary purpose of the partners coming together?
In a general partnership, what is the primary purpose of the partners coming together?
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What distinguishes a corporation's ability to act legally from that of its shareholders?
What distinguishes a corporation's ability to act legally from that of its shareholders?
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What type of partnership involves partners who have liabilities limited to their investment?
What type of partnership involves partners who have liabilities limited to their investment?
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Study Notes
Sole Proprietorship
- Single owner entitled to all profits.
- Owner is responsible for all debts.
- Funding typically comes from owner investment and bank loans.
Partnership (General)
- Association of two or more co-owners operating a business for profit.
Partnership (Limited)
- Two classes of partners: general and limited.
- General partners manage the business and have unlimited liability for debts.
- Limited partners' liability is limited to their investment.
- Partnership lifespan is tied to the general partner's involvement.
Corporation
- Chosen when significant funding is needed.
- Functions separately from its owners (shareholders).
- Can sue and be sued, and own property.
- Legally owned by stockholders.
- Board of directors, elected by shareholders, appoints senior management.
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Description
This quiz covers the fundamental concepts of different business structures, including sole proprietorships, general partnerships, limited partnerships, and corporations. Understand the characteristics, advantages, and liabilities associated with each type of business entity.
