Types of Business Structures

A characteristic of a sole proprietorship is that the owner:

• Has access to unlimited funds
• Receives all the profit
• Transfers all the risk
• Delegates all functions

What do business owners consider when they select a business ownership structure?

• Personal circumstances, type of business, and product mix
• Product versatility, financial needs, and advertising strategies
• Personal circumstances, financial needs, and type of business
• Product versatility, advertising strategies, and personal circumstances

John, Robert, and Charles were college friends who wanted to start a business. John has creative ability, Robert's expertise is selling, and Charles' expertise is management. However, each has limited capital. The ideal business ownership for these young men is a

• Merger
• Partnership
• Franchise
• Corporation

If all of the individuals who own a business share unlimited liability for the business's losses, these individuals are part of a(n)

• Private Corporation
• General partnership
• S Corporation
• C Corporation

The Scott Company decided to sell stock to raise capital. Under what form of business organization does the company operate?

• Corporation
• Cooperative
• Partnership
• Sole proprietorship

The American Red Cross is an example of a(n) ___________ corporation.

• Hybrid
• Nonprofit
• S Corporation
• C Corporation

One of the characteristics of the form of business ownership known as an LLC is that

• This kind of business can last indefinitely.
• It is required to have at least three owners (members).
• The IRS collects taxes based on the LLC�s gross income.
• The owners' personal property cannot be taken to pay the business�s debts.

Wendy's sells the right to operate its restaurants to individuals who meet the company's criteria. The arrangement between Wendy's and these individuals is an example of

• A partnership agreement
• Multi-level marketing
• Licensing
• Franchising

This type of business is owned by one person.

• Partnership
• Sole Proprietorship
• Corporation
• Franchise

What is a major advantage of a business that is a partnership rather than a sole proprietorship?

• The responsibility for the business is shared
• The business is easy to set up
• The partners are not responsible for business debts
• The business is easy to sell