Canadian Business Law: Corporations Formation and Types
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Questions and Answers

What is a key characteristic of a sole proprietorship in terms of liability?

  • Liability protection
  • Limited liability
  • Unlimited liability (correct)
  • Shared liability
  • In a general partnership, how many individuals are required to come together to establish the business?

  • Only one
  • Three or more
  • At least five
  • Two or more (correct)
  • What type of legal entity is a general partnership?

  • Unincorporated entity (correct)
  • Corporation
  • Sole proprietorship
  • Independent legal entity
  • What level of control does a sole proprietor have over business decisions?

    <p>Complete control</p> Signup and view all the answers

    What type of liability do individual partners have in a general partnership?

    <p>Unlimited liability</p> Signup and view all the answers

    Which legal structure provides owners with protection from legal liabilities for injuries?

    <p>Corporation</p> Signup and view all the answers

    In terms of liability, how does a general partnership compare to a corporation?

    <p>General partnerships offer unlimited liability unlike corporations.</p> Signup and view all the answers

    Which type of legal entity is a corporation?

    <p>Independent legal entity</p> Signup and view all the answers

    What characteristic allows owners in a corporation to enjoy limited liability?

    <p>Legal separation between owners and business</p> Signup and view all the answers

    What type of liability does a sole proprietor face in their business?

    <p>Unlimited liability</p> Signup and view all the answers

    Which type of legal structure allows for complete control over business decisions?

    <p>Sole proprietorship</p> Signup and view all the answers

    In a general partnership, how is liability distributed among individual partners?

    <p>Joint and several liability</p> Signup and view all the answers

    What characteristic distinguishes a limited liability partnership from a general partnership?

    <p>Protection from personal liability for certain partners</p> Signup and view all the answers

    Which legal entity offers owners the benefit of limited liability protection?

    <p>Corporation</p> Signup and view all the answers

    What type of business structure provides owners with the potential for the highest financial benefits?

    <p>Sole proprietorship</p> Signup and view all the answers

    Which form of business structure involves a legal separation between the owner and the business?

    <p>Sole proprietorship</p> Signup and view all the answers

    In which type of business structure can owners collectively enter into legally binding contracts?

    <p>Corporation</p> Signup and view all the answers

    What is a key disadvantage of a general partnership compared to a corporation?

    <p>Unlimited personal liability for owners</p> Signup and view all the answers

    What feature distinguishes a limited liability partnership from a limited partnership?

    <p>Limited personal liability for all partners</p> Signup and view all the answers

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