Question

4. Forms of business organizations

Businesses can be classified into the following forms: proprietorship, partnership, corporation, limited liability company (LLC), and limited liability partnership (LLP).

Different forms of businesses have different characteristics. Which of the following characteristics belong to a limited liability company? Check all that apply.

( ) Types of businesses that may adopt this form designated by states

( )Owners with limited liability and possibly significant input into daily management of the firm

( ) Subject to double taxation

You see and read about different kinds of businesses every day. The following scenarios describe two businesses. Use the description of each business to classify it as a proprietorship, partnership, corporation, or limited liability partnership and/or limited liability company (LLP/LLC).

Business #1

Andrew and Abdul run a law firm in downtown Phoenix. The firm has debt of $100,000, but Andrew and Abdul will not be held personally liable for the firm's debts.

This is an example of:

O A corporation

O A proprietorship

O A partnership

O An LLP/LLC

Business #2

Juan, the CEO of a juice beverage company, is required to file the company's quarterly and annual employment, financial, and tax reports with the state and federal authorities. This is an example of:

O An LLP/LLC

O A proprietorship

O A partnership @ A corporation

Answer 1