Question

1. If you own a corporation, you can:
A. lose your home if your company gets sued
B. raise money by selling stock
C. avoid double taxation
D. none of the above

2. The sole proprietorship:
A. is easy to start
B. does not cost too much to open
C. incurs unlimited personal liability for the owner
D. all of the above

3. The ____________ is the form of ownership used by the majority of businesses in the country.
A. sole proprietorship
B. partnership
C. corporation
D. limited liability corporation

4. Which is true of a partnership?
A. it allows for continuity
B. it eases the financial burden for those who start the business
C. it allows for a variety of different skills sets
D. all of the above

5. You do NOT have double taxation with:
A. a partnership
B. an S Corporation
C. a sole proprietorship
D. all of the above

Answer 1

1. If you own a corporation, you can:

answer: C. avoid double taxation

According to the laws, a company which has been taxed on an income once cannot be taxed again.

2. The sole proprietorship:

answer: D. all of the above

In general, a sole proprietorship is easy to start, can be less costly to open bu does incure unlimited liability.

3. The ____________ is the form of ownership used by the majority of businesses in the country.

answer: D. limited liability corporation

A sole proprietorship has unlimited liability and is limited to funds of 1 person only while a company has to follow many stringent norms and a partnership also has unlimited liability so a limited liability partnership has benefits of both a company and a partnership and thus is mostly used.

4. Which is true of a partnership?

answer: D. all of the above

5. You do NOT have double taxation with:

answer: B. an S Corporation