Podcast
Questions and Answers
What is the most common type of firm in the world?
What is the principal limitation of a sole proprietorship?
Why do many new businesses use sole proprietorships as their organizational form?
Which type of firm can have only one owner?
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What is a characteristic shared by sole proprietorships?
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What type of firm is owned and run by one person?
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What is the principal limitation of a sole proprietorship?
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Which type of firm has unlimited personal liability for the owner?
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Which type of firm can have only one owner?
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What type of firm is straightforward to set up, leading many new businesses to use this form?
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Study Notes
Characteristics of Firms
- The most common type of firm in the world is a sole proprietorship.
Sole Proprietorships
- The principal limitation of a sole proprietorship is unlimited personal liability for the owner.
- Many new businesses use sole proprietorships as their organizational form because it is straightforward to set up.
- A characteristic shared by sole proprietorships is that they are owned and run by one person.
- Sole proprietorships can have only one owner.
- This type of firm is often used by new businesses due to its ease of setup.
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Description
This quiz covers the different types of firms in corporate finance including sole proprietorships, partnerships, limited liability companies, and corporations. It also discusses ownership versus control of corporations and the stock market.
