Review Business Law - Topic 2.1

Which form of business entity is the top choice for start-up businesses due to its ease of formation and maintenance?

• General Partnership

• Limited liability partnership

• Sole proprietorship

• Closely-held corporation

In which forms of business entity do the principals have unlimited liability for the entity's debts? (you can choose more than one option)

• General Partnership

• Limited liability company

• Sole proprietorship

• Corporation

Which of the following business entities have pass-through tax treatment for its principal(s) (you can choose more than one option)

• Partnership

• Limited liability company

• Sole proprietorship

• Corporation

Which of the following persons have the power to manage the daily operation of their business?

• General Partners in a partnership

• Limited partners in a partnership

• Sole proprietor

• All of the above

Liability of a limited partner in a limited partnership is:

• Unlimited, unless otherwise agreed

• Limited to what he/she contributed to the partnership

• similar to liability of general partners

• None of the above

True of False: In a general partnership, each partner receives equal share of the partnership's profit payment regardless of their contribution to the business's success, unless otherwise agreed.

• True

• False

An LLC is governed by...

• a partnership agreement

• an operating agreement

• a shareholders' agreement

• articles of incorporation

In which forms of business entity can the principals be an organization (not an individual) (you can choose more than one option)

• General Partnership

• Limited liability company

• Sole proprietorship

• Corporation