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Questions and Answers
A sole proprietorship is owned and operated by a ______.
single individual
Partnerships are owned by two or more ______ who share the profits, losses, and liabilities.
individuals
Limited Liability Companies provide ______ liability to its owners (members).
limited
LLCs can choose their tax treatment, either as a ______ or a corporation.
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A partnership typically has ______ personal liability for its partners.
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Study Notes
Business Ownership Structures
Sole Proprietorship
- A business owned and operated by a single individual
- Simplest form of business ownership
- Owner has unlimited personal liability for business debts and obligations
- Income generated is reported on the owner's personal tax return (pass-through taxation)
Partnership
- A business owned by two or more individuals who share the profits, losses, and liabilities
- Partners have shared responsibility for the business
- Partners typically have unlimited personal liability
- Income generated is typically reported on the partners' personal tax returns (pass-through taxation)
Limited Liability Company (LLC)
- A flexible form of business that provides limited liability to its owners (members)
- Members' liability is limited to their investment in the LLC
- LLCs can choose their tax treatment, either as a partnership or a corporation
- Provides the flexibility of management
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Description
Quiz: Types of Business Ownership Test your knowledge on different types of business ownership with this quiz. Learn about sole proprietorship, its key features, and the responsibilities of the owner. Explore partnerships and understand how they differ from sole proprietorships. Challenge yourself and enhance your understanding of various forms of business ownership.
