Chapter 11 BUS 139

Which of the following is a disadvantage of operating a sole proprietorship

• It is double taxed

• it does not provide the owner with limited liability protection

• it is not solely responsible for the debts incurred by the business

• it may be required to register the business with the state

A sole proprietor who has employees must apply for an Employer Identification Number

• True

• False

Which of the following is true about the sole proprietorship and the board of directors

• Must have a board of directors

• is not required to have a board of directors

• board members are always employees

• board members cannot be employees

What can be done to help assure the financial records of the business can be kept separate from the financial records of the proprietor?

• Hire a treasurer

• apply for an Employer Identification Number

• open a business checking account

• open a business credit card

Which of the following are true of a partnership

• partners always share equally in the profits or losses

• partners pay both personal and self employment tax

• partners cannot expect to be held liable for the debt of the business

• partnership agreement is a legal document

The roles of each partner should be laid out in the

It may be easier to obtain funding for a partnership than for a sole proprietorship

• True

• False

Which of the following business structures restricts the upper number of participants to 100

• C Corporation

• sole proprietorship

• S corporation

• LLC

A partnership agreement provides limited liability to the partners

• False

• True

A limited liability company can have investors

• True

• False