Question

1. Rank the following four types of businesses in order of risk to you with the highest risk being number one partnership, limited partnership, limited liability company, sole proprietorship

2. Describe the characteristics of sole proprietorships, partnerships, limited partnerships, and joint ventures

3. What makes corporation different from other forms of businesses such as sole proprietorships and partnerships

Answer 1

Answer to question no 1

Business in order of riskiness-

1. sole proprietorship
2. partnership
3. limited partnership
4. limited liability company
   
   Sole Proprietorship is the most risky business venture because only the owner is the person solely responsible for all the debts and liabilities of the comapny. If the markets fail or the company faces loss, the burden will fall solely on the owner.
   partnership is also highly risky because the burden of the debts and losses fall equally on both the owners.
   Limited partnership and Limited liability company are less risky venture. This is because in limited partnership, the limited partners are protected from any liabilities and debt. A limited partner is just liable for the amount he invested in the company. In case of Limited liability company, the burden of the liability falls directly on the comapny and not on the investor or the owner.