BUSN11 Chapter 6 Exam Questions With Revised Answers
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Course
BUSN 11
Institution
BUSN 11
BUSN11 Chapter 6 Exam Questions With
Revised Answers
Sole Proprietorship - answersingle owner who manages the company
Partnership - answervoluntary agreement between two or more co-owners of a business for
profit
General Partnership - answerall partners take an active role in managing the busi...
BUSN11 Chapter 6 Exam Questions With
Revised Answers
Sole Proprietorship - answer✔✔single owner who manages the company
Partnership - answer✔✔voluntary agreement between two or more co-owners of a business for
profit
General Partnership - answer✔✔all partners take an active role in managing the business and
have unlimited liability for claims against the firm
Corporation - answer✔✔Business is considered a legal entity that id separate and distinct from
its owners. Created by filing the articles of incorporation and paying a fee of incorporation to the
appropriate state agency. Owners of a corporation have limited liability.
Limited Liability Company - answer✔✔offers limited liability to owners and flexible tax
treatment
Advantages of Sole Proprietorship - answer✔✔ease of formation, retention of control, pride of
ownership, retention of profits, possible tax advantage
Disadvantages of Sole Proprietorship - answer✔✔limited financial resources, unlimited liability,
limited ability to attract and maintain talented employees, heavy workload and responsibilities,
lack of permanence
General Partnerships - answer✔✔No limit on the number of partners. Partnership agreement
should entail details regarding initial financial contributions, specific duties and responsibilities,
sharing profits and losses, settling disagreements, and death or withdrawal of a partner
Advantages of Partnerships - answer✔✔ability to pool financial resources, ability to share
responsibilities and capitalize on complementary skills, ease of formation, and possible tax
advantages
Disadvantages of Partnerships - answer✔✔unlimited liability, potential for disagreements, lack
of continuity, and difficulty in withdrawing from a partnership
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