Topic 2

What is a corporation?

• A sole proprietorship

• A type of partnership

• A legal entity separate from its owners

• An informal business structure

What distinguishes a C corporation from an S corporation?

• S corporations have no shareholders

• S corporations file taxes separately from owners

• C corporations pass income to shareholders

• C corporations file taxes separately from the business

Which of the following is NOT a type of corporation?

• General partnership

• Limited liability company

• S corporation

• C corporation

What is a sole proprietorship?

• A corporation with shareholders

• A business operated by one individual

• A company with limited liability

• A business with multiple owners

In a general partnership, who assumes liability for the business?

• The sole proprietor

• All partners equally

• The corporation

• Only the managing partner

What is a limited liability partnership (LLP)?

• A partnership where each owner has limited liability

• A partnership with unlimited liability

• A corporation with limited partners

• A sole proprietorship with partners

What does a limited liability company (LLC) combine?

• Corporation and partnership structures

• Corporation and sole proprietorship structures

• Partnership and sole proprietorship structures

• General partnership and corporation structures

Who are primary stakeholders in a corporation?

• Only the shareholders

• Investors, employees, customers, and suppliers

• External auditors and regulators

• Only the management team

What is the difference between internal and external stakeholders?

• Internal stakeholders are affected by the business, external are not

• Internal stakeholders have a direct relationship with the company

• External stakeholders own shares in the company

• Internal stakeholders are only customers

What defines a shareholder?

• A supplier to the business

• An employee of the corporation

• A person who holds shares in a company

• An individual affected by business decisions