Sole Proprietorships, Partnerships, And Corporations

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| By Flipper122

Flipper122

Community Contributor

Quizzes Created: 1 | Total Attempts: 1,535

Questions: 6 | Attempts: 1,535 | Updated: Mar 21, 2023

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Questions and Answers

1.

What is the most common form of ownership in the United States?
- A.
  
  Sole Proprietorship
- B.
  
  Partnership
- C.
  
  Corporation
- D.
  
  Aflac
Correct Answer
A. Sole Proprietorship

Explanation
The most common form of ownership in the United States is sole proprietorship. This means that a business is owned and operated by a single individual who is solely responsible for all aspects of the business, including its profits and losses. Sole proprietorships are popular because they are easy to set up and have fewer legal requirements compared to other forms of ownership. Additionally, the owner has complete control over the business decisions and can retain all the profits.

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2.

What is one advantage of a sole proprietorship?
- A.
  
  Limited Size
- B.
  
  Unlimited Liability
- C.
  
  Limited Life
- D.
  
  Secrecy
Correct Answer
D. Secrecy

Explanation
One advantage of a sole proprietorship is secrecy. This means that the owner has complete control over the business and can keep all information confidential. This can be beneficial for businesses that want to protect their trade secrets, strategies, or sensitive information from competitors. Additionally, the owner can make decisions without having to consult with partners or shareholders, allowing for more flexibility and autonomy in running the business.

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3.

What percent of businesses in the United States are partnerships?
- A.
  
  10%
- B.
  
  40%
- C.
  
  65%
- D.
  
  100%
Correct Answer
A. 10%

Explanation
Approximately 10% of businesses in the United States are partnerships. This means that out of all the businesses in the country, only a small fraction operate as partnerships. Partnerships are a type of business structure where two or more individuals share the ownership and responsibilities of the business. The majority of businesses in the United States are actually sole proprietorships or corporations.

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4.

What is a disadvantage of a partnership?
- A.
  
  Lack of success
- B.
  
  Limited Liability
- C.
  
  Unlimited Liability
- D.
  
  Birth Defect
Correct Answer
C. Unlimited Liability

Explanation
Unlimited liability is a disadvantage of a partnership. This means that each partner is personally liable for all the debts and obligations of the partnership, even if it exceeds their personal investment. This can put the partners' personal assets at risk and potentially lead to financial ruin if the partnership faces financial difficulties or legal issues. Limited liability, on the other hand, would protect the partners' personal assets from such risks.

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5.

What is an advantage of a corporation?
- A.
  
  Making money
- B.
  
  Indefinite Life
- C.
  
  Indecent Life
- D.
  
  Government Restrictions
Correct Answer
B. Indefinite Life

Explanation
An advantage of a corporation is its indefinite life. Unlike other business structures, such as sole proprietorships or partnerships, a corporation can continue to exist even if its owners or shareholders change or pass away. This allows for long-term planning, stability, and the ability to attract investors who are looking for a business with longevity. Additionally, the indefinite life of a corporation provides continuity and allows for the possibility of passing on the business to future generations.

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6.

Which business tends to generate the most revenues?
- A.
  
  Corporations
- B.
  
  Sole Proprietorships
- C.
  
  Partnerships
- D.
  
  Lowe Dining Hall
Correct Answer
A. Corporations

Explanation
Corporations tend to generate the most revenues because they are large and have the ability to attract more customers and investors. They have a separate legal entity from their owners, which allows them to raise capital through the sale of stocks and bonds. Additionally, corporations have the advantage of limited liability, which means that the owners are not personally responsible for the company's debts. This makes corporations more attractive to investors and allows them to expand their operations and generate higher revenues.

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Current Version
Mar 21, 2023

Quiz Edited by
ProProfs Editorial Team
Sep 19, 2011

Quiz Created by
Flipper122

Sole Proprietorships, Partnerships, And Corporations

What is the most common form of ownership in the United States?

What is one advantage of a sole proprietorship?

What percent of businesses in the United States are partnerships?

What is a disadvantage of a partnership?

What is an advantage of a corporation?

Which business tends to generate the most revenues?