Sole Proprietorship
Which of the following is a defining characteristic of a sole proprietorship?
A.) Owned and operated by one individual
B.) Owned by shareholders
C.) Requires a board of directors
D.) Must be registered as a non-profit
What is answer choice "A"
True or False? A partnership is owned by two or more people.
What is "true"
LLC stands for this.
What is "limited liability company"
True or False? This type of corporation pays taxes separately from its owners.
True or False? This type of corporation avoids double taxation by passing income to shareholders.
What is true
The owner of a sole proprietorship has this type of liability for business debts.
What is "unlimited" liability.
In a general partnership, partners share profits and ___________ equally.
What is "liability"
True or False: Owners of an LLC are called shareholders.
What is "False"
Owners of a C-Corporation are called this.
What are shareholders
True or False: An S-Corporation can have unlimited shareholders.
What is false
True or False: Sole proprietorships require formal registration with the state.
What is "False"
Name one disadvantage of a partnership compared to a sole proprietorship.
LLC owners have this type of liability protection.
What is "limited liability"
C-Corporations face this type of taxation on profits and dividends.
What is double taxation
S-Corporations are limited to this maximum number of shareholders.
What is "100"
Name one major advantage of a sole proprietorship.
What is full control over decision making. Or keeping all profits.
Partnerships often use this type of agreement to outline roles and responsibilities.
What is a "partnership agreement"
Name one tax advantage of an LLC compared to a c-corporation.
What is Pass through taxation
Name one advantage of forming a C-Corporation.
What is ease of attracting investors or business can remain when owner passes or leaves.
Name one eligibility requirement for an S-Corporation.
What is "must be a domestic corporation"
If the owner of a sole proprietorship dies, what happens to the business?
What is "does not exist"
What is the term for a partner who invests money but does not manage the business?
What is a "silent partner"
What is the term for the document that establishes an LLC?
what is "articles of organization"
What is the maximum number of shareholders a C-Corporation can have?
What is unlimited
What is one major difference between an S-Corporation and a C-Corporation in terms of taxation?
What is a valid explanation of why pass-through taxation is better than double taxation.