Business Trade Names and Forms Quiz

What is the main advantage of forming a sole proprietorship?

Why is it important to register a trade name for a business?

What happens to the assets of a sole proprietorship after the owner's death?

What is a key disadvantage of a sole proprietorship in terms of business continuity?

How are net profits of a sole proprietorship taxed?

Which form of business structure allows for unlimited personal liability?

What type of partnership has unlimited personal liability for general partners but no personal liability for limited partners?

Which business structure faces 'double taxation' due to corporate earnings and shareholder dividends being taxed separately?

In which structure do all owners have limited liability for the acts of other partners?

Which structure allows an unlimited number of general and limited partners?

Which business entity requires filing a Certificate of Limited Liability Partnership at SDAT?

Which structure can be created by certain professionals like accountants, attorneys, architects, dentists, or doctors?

Sole Proprietorship Advantages

Simplicity and ease of formation: Requires minimal paperwork and registration, making it quick and easy to set up.

Trade Name Registration

Protection and branding: Registering a trade name safeguards the business name and helps establish a brand identity.

Assets After Owner's Death

Pass to heirs: Assets of a sole proprietorship are part of the owner's personal estate and pass on to their heirs according to their will or state law.

Business Continuity Disadvantage

Lack of continuity: If the owner dies or becomes incapacitated, the business may cease to operate or must undergo a significant transition.

Sole Proprietorship Tax Treatment

Pass-through taxation: Profits and losses are reported on the owner's personal income tax return, avoiding double taxation.

Unlimited Personal Liability

Sole proprietorship: The owner is personally liable for all business debts and obligations.

Limited Liability Partnerships

Limited partners: Have no personal liability for business debts and losses, while general partners bear full responsibility.

Double Taxation

Corporations: Experience double taxation, as both corporate earnings and shareholder dividends are taxed separately.

Limited Liability for Partners

Limited Liability Partnerships (LLPs): All partners have limited liability for the actions of other partners.

Unlimited Partners

Limited Liability Partnerships (LLPs): Allows for an unlimited number of both general and limited partners.

Certificate of Limited Liability Partnership

LLPs: Require the filing of a Certificate of Limited Liability Partnership with the State Department of Taxation and Assessment (SDAT).

Professional Corporations

Professional corporations: Specifically designed for certain professions, like accountants, attorneys, architects, dentists, or doctors.

Test your knowledge on trade names in business, including requirements for registration and legal implications. Explore different forms of business ownership such as sole proprietorships and the liabilities associated with them.