Nature and Form of Business Organization

What is the primary characteristic of a Sole Proprietorship?

• It has a legal distinction between the owner and the business.

• It is owned and run by one individual.

• The owner's liability is limited to their investment.

• It requires many partners for its establishment.

In a General Partnership, what is the nature of the partners' liability for business obligations?

• Unlimited personal liability.

• Limited to their capital contribution.

• Only liable for their own actions

• Shared equally among all limited partners.

A Corporation is defined as:

• A business owned and run by one individual.

• A business owned by two or more individuals.

• A legal entity separate and distinct from its owners (shareholders).

• • An autonomous association of persons united voluntarily.

In a Cooperative, how are decisions typically made?

• By a board of directors elected by capital contribution.

• By members on an equal basis (democratic control).

• By a single general manager.

• By the government.

A Limited Liability Company (LLC) is described as a hybrid business structure that combines:

• The unlimited liability of a partnership with corporate taxation.

• The limited liability of a corporation with the pass-through taxation and operational flexibility of a partnership or sole proprietorship.

• The democratic control of a cooperative with the complexity of a corporation.

• The simplicity of a sole proprietorship with double taxation.

In a Cooperative, profits (surplus) are often distributed based on ____________________________, not capital.

• In a _____________ partnership, all partners share in the management and have unlimited personal liability for business obligations.

How does business ethics form the foundation for social responsibility?

Cooperatives are primarily __________-Oriented, formed to provide goods/services to members at lower cost or higher quality.

Corporations can be subject to "__________ taxation" (corporate profits taxed, then dividends taxed) unless structured otherwise.