Business Organizations

Which of the following is an advantage of a sole proprietorship

• easy to start up
• Decisions do not require the approval of a co-owner, boss, or other "higher-up
• the owner can keep the profits of successful management without having to share them with other owners. 
• All the other options

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

• it is easy to start
• he owner is personally and fully responsible for all losses and debts of the business. If the business fails, the owner’s personal possessions may be taken away to satisfy business debts.
• requires a partner
• it is easy to raise the financial capital to start

Which of the following is an advantage of a partnership? 

• they are hard to start
• management is hard between two or more people
•  partnerships can usually attract financial capital more easily than proprietorships.
• They are inefficient. 

Which of the following is a disadvantage of a partnership? 

•  If one partner causes the firm to suffer a huge loss, each partner is fully and personally responsible for the loss.
• When a partner dies or leaves, the partnership must be dissolved and reorganized as a new partnership if the remaining partners want to stay in business.
• the potential for conflict between partners. 
• all the options are disadvantages

Which of the following is a disadvantage of a corporation?

• it is easy to raise financial capital using stocks, bonds, or loans. 
•  the double taxation of corporate profits. Profits are taxed the first time when the corporation pays income taxes. The profits are taxed a second time when shareholders pay taxes on their dividends.
• it is easy to get a charter to start a corporation. 
• Owners and shareholders have total control over what happens with the business. 

Which of the following is an advantage of a corporation?

• all other answers are advantages. 
•  the corporation provides limited liability for its owners. This means that the corporation itself, not its owners, is fully responsible for its obligations.
•  the corporation's board of directors can hire professional managers to run the firm. This means that the corporation's owners, its stockholders, can own a portion of the corporation without having to know much about the business itself.
• unlimited life, meaning that the corporation continues to exist even when shareholders sell their ownership shares of stock to someone else. Because the corporation is recognized as a separate legal entity, the name of the company stays the same, and the corporation continues to do business.

Sara’s Hair Palace is a small, locally owned beauty salon in Sterling. This represents what type of business?

• corporation
• partnership
• sole proprietorship

Dan has $5,000. He wants to invest his money in the type of business that has the least amount of liability. In which type of business should he invest?

• corporation
• partnership
• proprietorship

A business partnership has ___________ who share the risks and the profits.

• One owner
• No more than three owners
• Two or more owners
• Five or more owners

A business owner who prefers to maintain complete control of all business activities might consider structuring the venture as a(n)

• sole proprietorship
• general partnership.
• franchise
•  corporation.