Cat. 1
what are the five forms of business organizations?
Sole Proprietor, Cooperative, Partnership, Corporation, LLC
How many people are required to form a partnership?
At least two.
What does LLC stand for?
Limited Liability Company.
Who owns a corporation?
Stockholders (shareholders).
Who owns a cooperative?
A group of members who share benefits.
What is a Sole Proprietorship?
business owned and run by one person, with no legal distinction between the owner and the business itself.
What is the difference between a general partnership and a limited partnership?
General = all partners share equally; Limited = some only invest and have limited liability.
What type of liability protection do LLC owners have?
Limited liability (owners are not personally responsible for business debts).
What group do stockholders elect to oversee management?
The Board of Directors.
What voting system do most co-ops use?
“One member, one vote.”
What is the biggest risk of a sole proprietorship?
Unlimited personal liability.
What is one advantage of a partnership?
Shared decision-making, larger pool of capital, or ease of start-up.
What tax advantage does an LLC often provide?
Pass-through taxation (profits taxed as personal income).
What is the biggest disadvantage of a C-corporation when it comes to taxes?
Double taxation (corporation pays taxes and shareholders pay taxes on dividends).
What is one advantage of a co-op?
Shared profits, democratic structure, or access to grants.
Name one advantage of a sole proprietorship.
Easy to start, full control, or keeps all profits.
What is one disadvantage of a partnership?
Unlimited liability (in general partnerships) or potential for conflict.
Why might small businesses choose LLC over corporations?
Less paperwork, flexible management, and protection from liability.
What is one advantage of a corporation?
Limited liability, ability to raise capital by selling stock, or continuity.
What is one disadvantage of a co-op?
Hard to raise large capital, slower decision-making, or accountability issues.
Give a real-world example of a sole proprietorship.
Local bakery, freelance designer, or lawn care business.
Give one professional field where partnerships are common.
Law firms, medical practices, or accounting firms.
Give one example of a type of business that might use an LLC structure.
Start-ups, family businesses, or small consulting firms.
Give a real-world example of a corporation.
Apple, Amazon, Coca-Cola, Microsoft, etc.
Give a real-world example of a cooperative.
Credit unions, agricultural co-ops, housing co-ops, or utility co-ops.