Sole Proprietorships
This is the simplest and most common type of business ownership in the U.S.?
What is sole proprietorship?
A partnership is formed when two or more people combine these things.
What is money, property, labor, or skills to run a lawful business for profit.
True or False: A nominal partner can be held liable for debts even if they didn’t invest money.
True/False. An LLC cannot be sued by third-parties as a separate entity.
This partnership combines the flexibility of a partnership with the protection of a corporation.
What is a Limited Liability Company (LLC)
In a sole proprietorship, this person owns all business assets such as equipment, inventory, and tools?
What is the proprietor (owner)?
All partners have this type of liability.
What is "limited" liability?
This type of partnership cannot operate under common law.
What is limited liability partnership?
This document must be filed with the state to create an LLC.
What is Articles of Organization?
This is true of the contract if a partner acts as an agent for the partnership.
What is the contract is "binding"? (cannot be avoided by the other partners)
True or False: A sole proprietor must file legal documents with the state before starting the business.
What is false? (they can begin operating immediately)
True or False: A nonprofit group raising money for charity is legally considered a partnership.
What is false? (partnerships must have a profit motive)
This type of partnership is engaged in buying and selling merchandise.
What is trading?
True or False: In an LLP, at least one partner must have unlimited liability.
What is false? (no partner must have unlimited liability)
When a partner makes an honest mistake (not negligence) while working on behalf of the partnership.
This happens to a sole proprietorship when the owner dies.
This must a partnership’s purpose be in order to be recognized by law.
What is operating a lawful business?
This type of partner takes part in management but keeps their identity hidden?
What is a secret partner?
This written document outlines how an LLC is run, including profits, duties, and voting rights.
What is an operating agreement?
This historical entrepreneur began as a sole proprietor selling horseradish.
Who is Henry John Heinz?
"DBA" stands for this.
What is "Doing Business As"?
A sole proprietor has _______________ liability and ______ financial risk.
What is unlimited and high?
This type of partner is unknown to the public and inactive in management.
What is a dormant (or sleeping) partner?
This term refers to when members lose liability protection because they failed to treat the LLC as a separate entity.
What is "piercing the corporate veil"?
This is one major difference between a partnership and a joint venture.
What is a joint venture is for one project or short duration, partnerships are ongoing?