Understanding Business Entities

What is a key advantage of a sole proprietorship?

• Perpetual existence

• Automatic transferability of ownership

• Avoidance of double taxation

• Limited liability for losses

What is required to form a general partnership?

• Filing with the state

• A certificate of limited partnership

• At least two people co-owning a business

• Election by a small business corporation form

Which entity is characterized by unlimited liability for all partners?

• General Partnership

• Limited Partnership (LP)

• Limited Liability Company (LLC)

• Limited Liability Partnership (LLP)

What is a characteristic of a Limited Liability Company (LLC)?

• Centralized management

• Limited liability for all members

• Double taxation

• Unlimited liability for general partners

What does the 'S' in S corporation stand for?

• State

• Special

• Subchapter

• Small

Which business entity is not a separate legal entity?

• Corporation

• Sole Proprietorship

• S Corporation

• Limited Liability Company (LLC)

What is required for a business to be considered a Limited Partnership (LP)?

• Filing as a small business corporation

• At least one general and one limited partner

• No more than 100 shareholders

• Only one class of stock

Which entity can elect not to be treated as a separate taxable entity?

• General Partnership

• S Corporation

• Limited Liability Limited Partnership (LLLP)

• Corporation

What is a disadvantage of a sole proprietorship?

• Limited control over management

• Double taxation

• Unlimited personal liability for losses

• Compulsory state filing

Which entity is designed for professional partnerships like law firms?

• Limited Liability Partnership (LLP)

• Limited Liability Company (LLC)

• Limited Partnership (LP)

• Corporation