Sole Proprietorships
THow many people own and operate a sole proprietorship?
One person
A corporation is a legal entity that exists only on paper and has most rights of a real ____.
Person
Which structure combines partnership tax benefits with corporate limited liability?
LLC (Limited Liability Company)
According to SBA standards, manufacturing businesses are small if they have how many or fewer employees?
500 employees or less
What portion of business risks does a sole proprietor accept?
ALL the risks
Who are the true legal owners of a corporation?
Stockholders / Shareholders
What type of corporation provides social or educational services instead of seeking profit for personal gain?
Nonprofit Organization
Small businesses employ roughly what percentage of all private sector employees in the U.S.?
About half (50%)
Name ONE advantage of starting a sole proprietorship over a corporation.
Easy/inexpensive to start, keep all profits, full decision control, or lower taxes
What term describes the tax disadvantage where corporate profits and dividends are both taxed?
Double Taxation
BONUS!!! If a farm has a bumper crop and prices for crops drop, people still do not buy twice the product. That is because farm products are…
Inelastic Supply
What is the primary reason given for small business failure?
Lack of business knowledge (mismanagement)
What type of liability means a owner's personal assets can be taken to pay business debts?
Unlimited liability
According to corporate structure, who appoints or elects the Board
The Stockholders
BONUS!!!
True or False The four factors of Perfect Competition will always be present in the market.
False
What shareholder is paid back first if a business goes bankrupt?
Preferred Stockholders
Sole proprietorships generate over 80% of total U.S. sales
False
Rank these corporate roles from top to bottom in authority: Officers, Stockholders, Employees, Board of Directors.
Stockholders → Board of Directors → Officers → Employees
Name TWO advantages an LLC enjoys over a traditional C-Corporation
No double taxation, limited liability, & not required to publish annual reports
Approximately what percentage of small businesses in the United States are home-based?
52%