Chapter 5

True or false: In a limited partnership, the liability of the limited partners is unlimited and personal assets are at risk.

False

Which is an advantage of the corporate form of business ownership?

Limited liability

Because owners are only responsible for losses up to the amount they have invested in a corporation, limited liability is considered:

a major advantage

Among the reasons that disagreements can ruin a partnership are:

arguments over dividing profits disagreement over workload opposing management styles

Selling shares of stock to anyone allows a _________ to raise more money to grow.

corporation

If you are your own boss, you are responsible for paying your own wages/salary and for your own _____ _____

fringe benefits

A sole proprietorship has a limited life span unless:

it is sold to someone else it is taken over by an heir

When a sole proprietor leaves an ongoing business to future generations, it is said that the owner is leaving a _____

legacy

Stockholders' liability for losses only up to the amount they invest is called ______________.

limited liability

The form of partnership that limits liability to the limited partner's own acts or those of the people they supervise is a:

limited liability partnership

A business that is owned and managed by one person is a(n)

sole proprietorship

If you start and manage a landscaping business on your own, you have likely started a:

sole proprietorship

True or false: The main advantage of a sole proprietorship is ease of start up.

true

The responsibility of the owner of a sole proprietorship for all of the debts of the business is ____ liability

unlimited

When you own a sole proprietorship you and the business are considered one, so you have ______ liability for financial obligations such as debt.

unlimited

If your company debts or damages are solely your responsibility you could be experiencing the disadvantage associated with owning a sole proprietorship called ____ _____

unlimited liability

In a sole proprietorship, any debts or damages incurred by the business are your personal debts and you must pay them. This disadvantage is known as:

unlimited liability