Understanding Business Structures Flashcard

Front

What is a key characteristic of a sole proprietorship?

Back

Unlimited liability for the owner

Front

In a general partnership, how is the income taxed?

Back

Income is taxed once on each partner's individual tax return

Front

Which business structure provides limited liability to its investors? Options: Sole Proprietorship, Partnership, Corporation, General Partnership

Back

Corporation

Front

What is a primary advantage of a Limited Liability Company (LLC)?

Back

Limited liability for its members

Front

Which business structure can be taxed as a "pass-through" entity? Options: Corporation, Sole Proprietorship, Limited Liability Company (LLC), Franchise

Back

Limited Liability Company (LLC)

Front

What is a common feature of a franchise agreement?

Back

Fixed time period and specific territory

Front

Which business structure requires the filing of Articles of Incorporation? Options: Sole Proprietorship, Partnership, Corporation, Franchise

Back

Corporation

Front

What is a potential drawback of a partnership?

Back

Unlimited liability for partners

Front

Which business structure can be a hybrid of other structures? Options: Sole Proprietorship, Partnership, Corporation, Franchise

Back

Franchise

Front

What is a characteristic of an S-corporation?

Back

It is treated as a partnership for tax purposes