Business Structures
Which business structure is the easiest and simpliest to start up?
Sole Proprietorship
Which is an advantage of a Sole Proprietorship?
A. The owner has limited liability
B. It is generally simple to start, and the owner controls decisions
C. The business can sell stock
D. The business has multiple owners
B. It is generally simple to start, and the owner controls decisions
5. Which is a possible disadvantage of a Partnership?
A. Only one person can own it
B. Partners may disagree about business decisions
C. It cannot earn a profit
D. It must operate as a nonprofit
B. Partners may disagree about business decisions
Which of the following is for-profit?
A. The organization exists mainly to serve a community need or mission.
B. Investors may put money into the business hoping to earn money in return.C. Donations and grants may be important sources of funding.
D. Money earned is put back into the organization to support its mission and programs.
B. Investors may put money into the business hoping to earn money in return.C. Donations and grants may be important sources of funding.
17. Which group is most likely to oversee a nonprofit organization according to the article?
A. One owner
B. Customers
C. Board of directors
D. Stockholders seeking profits
C. Board of directors
In a corporation, the owners are called __________, and in an LLC, the owners are called __________.
Shareholders, Members
6. Which is an important advantage commonly associated with an LLC?
A. Owners generally receive liability protection for their personal assets
B. It can never be taxed
C. It must have hundreds of owners
D. Owners cannot make business decisions
A. Owners generally receive liability protection for their personal assets
Name two disadvantages for Sole Proprietorship
Which of the following is Nonprofit
A. The business can have an individual owner or multiple owners.
B. Profits may financially benefit the owners or investors.
C. Increasing sales and earning profits are important goals.
D. The organization may qualify for tax-exempt status.
D. The organization may qualify for tax-exempt status.
What is the main purpose of a for-profit and a non-profit business?
For-profit: Earns income and profit through its business activities.
Nonprofit: Provides community services without earning money.
What is one major advantage of forming an LLC? Name 2 examples of what it protects.
It helps protect the owners’ personal assets from business debts.
Examples: Home, real-estate, money in bank accounts, cars
9. Which is an advantage of a Corporation?
A. It is always the easiest structure to establish
B. Shareholders generally have limited personal liability
C. It has no government requirements
D. It does not have to pay taxes
B. Shareholders generally have limited personal liability
10. Which is a possible disadvantage of a Corporation?
A. It cannot hire employees
B. It cannot have multiple owners
C. It can involve more regulations, paperwork, and costs
D. It cannot raise money from investors
C. It can involve more regulations, paperwork, and costs
Accountability • Staff • Culture • Funding • Ownership • Taxes • Purpose • Leadership • Audience
Which factor is the following
1. Who works for the organization? Does it have paid employees, volunteers, or both?
2. Who is the organization trying to reach, serve, or sell its products or services to?
3. Where does the organization get the money it needs to operate?
1. Staff
2. Audience
3. Funding
What is the difference between an investor and a donor, according to the article?
Investors may receive a financial return, while donors do not receive a share of profits for their contribution.
Name all four business sturctures.
Sole Proprietorship, Partnership, LLC, or Corporation
Malia wants to start a small jewelry business by herself. She wants complete control and wants the simplest structure to start. What business structure might fit these goals? Explain ONE advantage and ONE disadvantage.
Business Structure: ______________________
Advantage: __________________________________________
Disadvantage: ________________________________________
Business Structure: Sole Proprietorship
Advantage: Complete control, simplest structure
Disadvantage: Take on all the responsibilities/Debt of the owner
Nonprofit or For-profit? Name 2 clues from the scenario.
A new organization opens in Nānākuli. Its mission is to provide free after-school tutoring, school supplies, and meals to students. The organization receives donations from community members and local businesses. It also SELLS T-SHIRTS at community events to raise additional money. The money earned from selling the T-shirts is used to pay for tutoring, meals, school supplies, and other student programs.
Nonprofit
Clue #1: Its mission is to provide free after-school tutoring, school supplies, and meals to students.
Clue #2: The organization receives donations from community members and local businesses.
Nonprofit or For-Profit?
Give 2 clues from the scenario that prove your answer.
CASE #1 — LEILANI’S SHAVE ICE
Leilani uses $20,000 of her own money to open a shaved ice business. Customers purchase shaved ice from her store. After paying employees, rent, supplies, and other business expenses, Leilani keeps the remaining profit as the owner.
For-Profit
Give 2 clues from the scenario that prove your answer.
Clue #1: Leilani uses $20,000 of her own money to open a shave ice business
Clue #2:Leilani keeps the remaining profit as the owner
Accountability • Staff • Culture • Funding • Ownership • Taxes • Purpose • Leadership • Audience
Which factor is the following?
Why does the organization exist? Is its main goal to make a profit or provide a benefit to the community?
Who guides the organization and makes major decisions, such as owners, shareholders, or a board of directors?
Who controls the organization and its property? Does the organization have owners?