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ESB Practice Exam 1 questions and answers
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ESB Practice Exam 1 questions and answers
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ESB Practice Exam 1 questions and answersWhat is entrepreneurship? - -Setting up a business with the aim to make a
profit.
-B2B - -Purchases requiring a tax exemption certificate; wholesale flooring
distributor
-B2C - -motorcycle repair shop; chain of local grocery stores
-S - Corporation - -offers many of the same benefits as a c corporation, but
better for small businesses. 100 shareholders maximum allowed. all must be
US citizens or residents. shareholders are not personally responsible for
business liabilities.
-c-corporation - -best if the company plans to someday sell stock to the
public; can issue shares to founders, employees, and investors. unlimited
owners (aka shareholders) allowed. shareholders are not personally
responsible for business liabilities. taxed twice - business pays at the
corporate level, and shareholders pay on income received. a separate tax
return is required for the business
-sole proprietorship - -best if you need an easy set-up. you may still need a
dba or business licenses to operate legally, but no other paperwork one
owner maximum. the owner is personally responsible for business liabilities.
no personal liability protection. taxed once - you pay on profits in your
personal tax return. separate tax return not needed
-Limited Liability Company (LLC) - -popular choice for business concerned
about liability protection. unlimited owners (aka members) allowed. no
shareholders. llcs cannot go public. members are not personally responsible
for business liabilities. an llc can choose how to be taxed by filing form 8832
with the irs. an llc can elect to be taxed as a sole proprietorship, partnership,
s corp, or c corp. an llc is not recognized globally; ypu may be taxed as a
corporation in other countries.
-owners of equity - -founders, partners, and shareholders
-an example of ______ compensation is paying field laborers for the amount
of fruit they pick - -piece work
-a _______ employee receives a set amount of pay each month without
overtime compensation for extra hours worked - -salary
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