Understanding Business Types

What is a sole proprietorship?

• A sole proprietorship is a type of corporation.

• A sole proprietorship is a government-owned business.

• A sole proprietorship is owned by multiple partners.

• A sole proprietorship is a business owned and operated by one person.

Who owns a sole proprietorship?

• A corporation.

• A partnership.

• A government entity.

• An individual.

What is one advantage of a sole proprietorship?

• High personal liability for debts.

• Complete control over business decisions.

• Limited access to funding.

• Shared decision-making with partners.

What is one disadvantage of a sole proprietorship?

• Unlimited personal liability.

• Easy transfer of ownership.

• No regulatory requirements.

• Limited access to capital.

Can a sole proprietor keep all the profits?

• Yes, a sole proprietor can keep all the profits.

• No, profits are subject to corporate tax regulations.

• Yes, but only a portion of the profits can be kept.

• No, a sole proprietor must share profits with partners.

What is a partnership?

• A partnership is a government program for small businesses.

• A partnership is a legal document that outlines employee benefits.

• A partnership is a type of loan agreement between two parties.

• A partnership is a business arrangement between two or more individuals who share ownership and management responsibilities.

How many people are needed to form a partnership?

• Only 1 person

• Exactly 5 people

• At least 3 people

• At least 2 people

What is one advantage of a partnership?

• Difficulty in attracting investors.

• Limited decision-making power.

• Increased personal liability for debts.

• Access to shared resources and expertise.

What is one disadvantage of a partnership?

• Limited decision-making authority.

• Guaranteed profits for all partners.

• No need for a formal agreement.

• Personal liability for debts and obligations.

What might happen if one partner leaves a partnership?

• The partnership will continue as usual without any impact.

• The partnership may dissolve or require restructuring.

• The remaining partner will gain full control without any changes.

• The partnership will automatically become more profitable.