Chapter 6

Which of the following statements is true of a limited company (LLC)?

It is a relatively new form of business ownership in the United States.

Which of the following is a disadvantage associated with a sole proprietorship?

Raising money to finance growth can be tough for business owners.

Which of the following is an advantage associated with a sole proprietorship.

Retention of control

A sole proprietorship is a form of business ownership in which:

a single owner actively manages the company

The benefits of a general partnership include its

ability to pool financial resources

In a sole proprietorship, any debts the company incurs are:

considered to be the owner's personal liabilities

A ______ is a form of business that is considered a legal entity that is separate and distinct from its owners.

corporation

Which of the following is an issue associated with general partnerships?

difficulty faced by a partner when withdrawing from the company

Which of the following statements is true of the formation of general partnerships?

expert legal assistance can be acquired when drawing up a partnership

A________ refers to a partnership where all partners take an active role in a managing and have unlimited liability.

general partnership

A typical partnership agreement includes details about:

how partners will settle disagreements

Unlike a sole proprietorship, a corporation:

is a legal entity that is separated and distinct from its owners.

Which of the following features of a sole proprietorship proves that it is a risky endeavor?

its unlimited liability

Since sole proprietorship's are extensions of their owners, they:

lack permanence

A corporation is a separate entity from its owners where the:

owners are not personally responsible for the obligation of the company.

Which of the following is a disadvantage of general partnerships?

partners capitalize on complementary skills

A(n) is a voluntary agreement under which two or more people act as co-owners of a business for profit.

partnership

Which of the following is one of the reasons why many people prefer a sole proprietorship?

pride of ownership

which of the following statements is true of a sole proprietors?

They often must perform tasks in areas where they lack expertise.

A ____ is a form of business that offers both restricted responsibility to its owners and flexible tax treatment

a limited liability company