Question

1. Which form of organization has ownership claims which that potentially are the most liquid? (= easy to sell ownership)

   a-Sub-chapter d-corporation b-CorporationGeneral partnership c-Limited partnership
2. In which of the following ways does a proprietorship differ from a partnership? a-Taxation b-Owner liability c-Liquidity of ownership d- Number of owners

3. in what ways does a limited partnership differ from a corporation?

   1. Ease of start-up

   2. Limited liability of owners

   3. Taxation

   4. Some owners do not participate in the day-to-day operations of the firm

Answer 1

1.b- corporation.

It is easy to sell ownership of corporation, it can be done by selling the shares owned.

Compared to this it is not liquid to sell ownership of general partnership, limited partnership and C- corporation.

2.d.-Number of owners.

A sole proprietorship will have only one owner, a partnership will have a minimum of two owners.

3.c.- taxation

Limited partnership is not taxed separately, the income is taxed in hands of partners.

Corporation is taxed separately, the dividends received by owners are taxed in their hands, so there is double taxation in case of corporations.