Business Types Quiz

What is a sole proprietorship?

• A business owned by two or more people

• A business owned by one person

• A type of corporation

• A business with no owner

What is an example of a sole proprietorship?

• A law firm

• A baker who runs their own shop

• A car dealership

• A company with shareholders

Which of these is an advantage of a sole proprietorship?

• Easy to form with fewer legal requirements

• Owners are not personally responsible for debt

• Shared decision-making

• Ability to raise large amounts of capital

What is a disadvantage of a sole proprietorship?

• Owners share profits with others

• Difficult to make business decisions

• Unlimited personal liability for debts

• It is expensive to start

What does "unlimited personal liability" mean for a sole proprietor?

• The owner only pays taxes once

• The owner's personal assets can be used to pay business debts

• The business is protected from lawsuits

• The owner must share profits

What is a partnership?

• A business owned and run by one person

• A business owned by shareholders

• A business where two or more people share ownership

• A type of franchise

What is an advantage of a partnership?

• Shared workload and responsibilities

• Unlimited liability for all partners

• Difficult to raise capital

• One person controls the business

Which of the following is a disadvantage of a partnership?

• Easy to raise capital

• Profits are not shared

• Partners may disagree on important decisions

• Liability is limited

What does it mean when profits are shared in a partnership?

• Only one partner keeps the profits

• The government takes the profits

• All partners receive a portion of the profits

• Profits are split based on who worked the most

What is a corporation?

• A business owned by one person

• A business owned by shareholders

• A business with no owners

• A small business with no employees