Business Classifications

What are the three most common classifications of businesses from an accounting perspective?

• Sole proprietorship, partnership, and corporation

• Partnership, corporation, and LLC

• Sole proprietorship, LLC, and cooperative

• Corporation, cooperative, and nonprofit

What is a sole proprietorship?

• A business owned by multiple individuals

• A business with limited liability

• A business that is a separate legal entity

• A business owned by one person

What is a drawback of a sole proprietorship?

• Limited liability and responsbility

• Shared control of the business

• Unlimited liability and responsibility

• Access to more resources

What is a partnership?

• A business owned by multiple individuals

• A business with limited liability

• A business that is a separate legal entity

• A business owned by one person

What is a consequence of a partnership?

• Limited liability

• Shared control of the business

• Having to compromise when there is a disagreement

• Access to more resources

What is a benefit of a sole proprietorship?

• Shared control of the business

• Unlimited liability

• Full control of the business

• Limited access to resources

What is a characteristic of a corporation?

• Unlimited liability

• Shared control of the business

• Separate legal entity

• Single ownership

What is a feature of a limited liability company?

• Unlimited liability

• Single ownership

• Separate legal entity

• Shared control of the business

What is the most common business structure in the US?

• sole proprietorship

• A business owned by multiple individuals

• corporation

• A business that is a separate legal entity

What is a benefit of a partnership?

• Limited liability

• able to bring multiple strengths to one business

• Unlimited liability

• Access to more resources