Business Structures and Their Characteristics

The video tutorial provides an overview of various business structures, including sole proprietorships, partnerships, corporations, LLCs, non-profits, franchises, joint ventures, subsidiaries, and cooperatives. It explains the characteristics, advantages, and disadvantages of each structure, focusing on aspects like liability, taxation, and control. The tutorial also highlights the differences between C corps and S corps, the benefits of LLCs, and the unique features of non-profits and cooperatives.

What is a key characteristic of a sole proprietorship regarding taxation?

• The business is exempt from all taxes.

• The business pays corporate taxes.

• The business is taxed separately from the owner.

• The business income is considered the owner's personal income.

In a limited partnership, what is the role of the general partner?

• They only provide financial support.

• They have limited liability and control.

• They have unlimited liability and control.

• They are not involved in the business operations.

What is a major advantage of forming a corporation?

• It offers strong protection from personal liability.

• It requires minimal record-keeping.

• It is inexpensive to form.

• It avoids double taxation.

How does an S corporation differ from a C corporation in terms of taxation?

• S corporations are taxed at the corporate level only.

• S corporations are not recognized by the IRS.

• S corporations avoid double taxation by passing income to personal tax returns.

• S corporations pay higher taxes than C corporations.

What is a benefit of forming an LLC?

• It cannot be dissolved.

• It provides personal liability protection.

• It requires shareholders to be U.S. citizens.

• It is subject to double taxation.

What is a requirement for a non-profit corporation to maintain its tax-exempt status?

• It must distribute profits to its members.

• It must engage in political campaigns.

• It must follow specific organizational rules.

• It must pay federal income taxes.

What is a primary benefit of franchising for new business owners?

• They have complete operational independence.

• They can avoid all business risks.

• They gain access to a proven business model.

• They do not have to pay any fees.

How do joint ventures typically benefit companies entering foreign markets?

• They guarantee immediate success.

• They require no initial investment.

• They provide access to new technologies and local expertise.

• They eliminate all competition.

What is a characteristic of a subsidiary company?

• It cannot be part of a larger corporation.

• It is a separate legal entity from its parent company.

• It is always located in the same country as its parent company.

• It operates independently of its parent company.

What distinguishes a cooperative business from other business structures?

• It is managed by a single owner.

• It does not allow members to vote.

• Profits are distributed based on shareholding.

• It is owned and operated for the benefit of its members.