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Questions and Answers
In a joint venture, partners share only in profits but not in losses.
False
Corporations are not allowed to enter into partnerships.
False
The relationship of joint venture partners is primarily governed by the law on corporations.
False
A sole proprietorship has a separate legal personality from its owner.
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Control and management of the business is not considered a factor in deciding the type of business organization.
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Owners' liability for business debts and obligations is not a factor to consider when deciding on a business organization.
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Partners are not personally responsible for the debts and obligations of a partnership.
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Corporations can be either stock or non-stock entities.
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Shareholders of a corporation are only responsible for the debts up to their capital contribution.
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Joint ventures involve two or more entities uniting to form a new corporation.
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Study Notes
Joint Ventures
- In a joint venture, partners exclusively share profits, bearing no responsibility for any losses incurred.
- Joint venture partnerships are primarily regulated by corporate law.
Business Structures
- Corporations cannot engage in partnerships.
- A sole proprietorship maintains a distinct legal identity separate from its owner.
- Control and management aspects are irrelevant when determining a business's organizational type.
Liability
- Owners do not face personal liability for any business-related debts or obligations in a partnership.
- Corporate shareholders are only liable for business debts up to the amount they contributed in capital.
Corporations
- Corporations can be categorized into two types: stock and non-stock entities.
- Joint ventures typically comprise two or more entities collaborating to establish a new corporation.
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Description
Test your knowledge on the nature and forms of business organizations including sole proprietorship and partnership. Learn about the characteristics, legal implications, and registration procedures for different types of business structures.
