Business Structures Quiz

What is the main characteristic of a sole proprietorship?

• Multiple owners

• One owner

• Board of directors

• Shareholders

Which is an advantage of a sole proprietorship?

• Limited liability

• Complete control over business decisions

• Easier to raise capital

• Shared responsibility

A common example of a sole proprietorship would be:

• Microsoft Corporation

• A local food truck owned by one person

• Goldman Sachs

• A law firm with multiple partners

Which is a disadvantage of a sole proprietorship?

• Unlimited personal liability

• Too many decision makers

• Complex tax structure

• Required board meetings

In a general partnership, partners:

• Have no liability for business debts

• Share profits and losses equally unless otherwise agreed

• Cannot participate in management

• Must be family members

A limited partnership:

• Has only general partners

• Requires all partners to be actively involved

• Includes at least one general partner and one limited partner

• Prohibits profit sharing

Which company is a well-known corporation?

• Apple Inc.

• Joe's Corner Store

• Local Plumber John

• Mary's Babysitting Service

A key advantage of a corporation is:

• Simple tax structure

• Limited liability protection

• Easy formation process

• Single owner requirement

What's a disadvantage of a partnership?

• Too much government oversight

• Limited growth potential

• Partners may disagree on decisions

• No tax benefits

Which business structure requires the most paperwork and formalities?

• Sole proprietorship

• Partnership

• Corporation

• None of the above