Forms of Business Organization Overview
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Questions and Answers

What is the main advantage of a Sole Proprietorship?

  • Unlimited source of capital
  • Limited government requirements (correct)
  • Incorporation of different personalities
  • Shared decision-making
  • How many individuals can form a Partnership?

  • Unlimited number of individuals
  • At least 10 individuals
  • Exactly 3 individuals
  • Maximum of 5 individuals (correct)
  • What is a disadvantage of a Partnership?

  • Lack of shared burden
  • Limited life
  • Potential for disagreements among partners (correct)
  • Unlimited liability
  • Which form of business organization is suited for small businesses?

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

    What type of partner contributes capital in cash or property?

    <p>Capitalist Partner</p> Signup and view all the answers

    Why might management in a Sole Proprietorship be dependent on the capacity of the owner?

    <p>Limited source of capital</p> Signup and view all the answers

    What type of partner contributes industry, labor, skill, talent, and capital to the partnership?

    <p>General Partner</p> Signup and view all the answers

    Which partner's liability to third persons is limited only to the extent of their capital contribution to the partnership?

    <p>Limited Partner</p> Signup and view all the answers

    Who is considered a silent partner?

    <p>Dormant Partner</p> Signup and view all the answers

    What type of partner manages actively the business of the partnership?

    <p>Managing Partner</p> Signup and view all the answers

    Which partner is known to the public as a partner of the business but has a concealed connection with the partnership?

    <p>Ostensible Partner</p> Signup and view all the answers

    What type of entity is owned by its shareholders with a board of directors overseeing its activities?

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

    What is a disadvantage of a Limited Liability Corporation?

    <p>Abuse of power by officers</p> Signup and view all the answers

    Which type of business activity involves providing services rather than products to customers?

    <p>Service Business</p> Signup and view all the answers

    What does merchandising involve?

    <p>Buying goods and selling them without changing their form</p> Signup and view all the answers

    Which of the following is an example of a service business?

    <p>Sari-sari stores</p> Signup and view all the answers

    What characterizes manufacturing as a type of business activity?

    <p>Converting raw materials into finished goods</p> Signup and view all the answers

    In the context of business activities, what is the primary difference between retailing and wholesaling?

    <p>Quantity of goods sold</p> Signup and view all the answers

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