Sole Proprietorships vs
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Questions and Answers

Which type of business structure has a single owner and the owner is in complete control?

  • Corporation
  • Limited liability partnership
  • Sole proprietorship (correct)
  • Partnership

    • What is one advantage of a sole proprietorship?

  • Taxation at personal rate (correct)
  • Limited liability
  • Ease of organization
  • Sharing of skills

    • Which type of business structure has multiple owners with common business interests?

  • Limited partnership
  • Limited liability partnership
  • Sole proprietorship
  • General partnership (correct)

    • What is one disadvantage of a partnership?

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

    Which type of partnership has one partner who is liable for all the losses?

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

    What is one advantage of a corporation?

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

    Which type of business structure requires the founders to be distinct from the assets and liabilities of the business?

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

    What is one disadvantage of a corporation?

    <p>Responsibility of all business actions</p> Signup and view all the answers

    What is the term for the percentage of money paid to shareholders as a share of the profits?

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

    What is one requirement for a corporation to be operational?

    <p>Unique name</p> Signup and view all the answers

    Which type of corporation has limited ownership by individuals of close relation and greater management compared to a public corporation?

    <p>Private corporation</p> Signup and view all the answers

    What is the term for the process when a company decides to sell its shares to the public?

    <p>Initial Public Offering (IPO)</p> Signup and view all the answers

    What is the main role of the Board of Directors in a corporation?

    <p>All of the above</p> Signup and view all the answers

    What type of shares reflect profitability in both preferred and common shares?

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

    What is the term for the right of common shareholders to have the first right to new share issues?

    <p>Pre-emptive right</p> Signup and view all the answers

    What is the advantage of corporations in terms of ownership transfer?

    <p>Ownership transfer is easy</p> Signup and view all the answers

    What is the term for a separate entity shared by individuals or organizations?

    <p>Joint venture</p> Signup and view all the answers

    What do mergers create in terms of efficiencies and cost savings?

    <p>Efficiencies and cost savings</p> Signup and view all the answers

    What is the term for when assets of a company are used to acquire finance to purchase?

    <p>Leveraged buy-out</p> Signup and view all the answers

    What is the main advantage of corporations in terms of expansion potential?

    <p>Expansion potential is easy</p> Signup and view all the answers

    Which type of corporation allows ownership by anyone and shares can be purchased on stock exchanges?

    <p>Public corporation</p> Signup and view all the answers

    What is the term for the process when a company decides to sell its shares to the public?

    <p>Initial Public Offering (IPO)</p> Signup and view all the answers

    What is the term for the right of common shareholders to have the first right to new share issues?

    <p>Pre-emptive right</p> Signup and view all the answers

    What is one advantage of corporations in terms of ownership transfer?

    <p>Ease of sourcing funds</p> Signup and view all the answers

    What is one disadvantage of a corporation?

    <p>Double taxation</p> Signup and view all the answers

    What is the term for a separate entity shared by individuals or organizations?

    <p>Joint venture</p> Signup and view all the answers

    What is one advantage of a sole proprietorship?

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

    What is one disadvantage of a partnership?

    <p>Employee-owner separation</p> Signup and view all the answers

    What do mergers create in terms of efficiencies and cost savings?

    <p>Efficiencies and cost savings</p> Signup and view all the answers

    What is the main role of the Board of Directors in a corporation?

    <p>Oversee management</p> Signup and view all the answers

    Which type of business structure allows the owner or manager to have complete control over the business?

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

    What is one advantage of a limited partnership compared to a general partnership?

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

    What is one disadvantage of a limited liability partnership?

    <p>Responsibility of all business actions</p> Signup and view all the answers

    What is one advantage of a corporation compared to a partnership?

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

    What is one disadvantage of a corporation?

    <p>Expensive to start</p> Signup and view all the answers

    What is the term for the process of sharing responsibilities, assets, profits, and liabilities in a general partnership?

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

    What is one advantage of a limited liability partnership compared to a general partnership?

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

    What is one disadvantage of a sole proprietorship?

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

    What is the term for the ownership of a corporation through shares?

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

    What is one advantage of a partnership compared to a sole proprietorship?

    <p>Sharing of skills</p> Signup and view all the answers

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