Test your knowledge of organizational types and considerations before you go through the training.
1. Which of the following best describes a sole proprietorship?
a. Business is one and the same as the owner
b. Business is an unincorporated hybrid entity with traits of a corporation and a general partnership
c. Business is an incorporated hybrid entity with traits of a limited liability company and a general partnership
d. Business is sometimes called a “taxable corporation”
2. What should be considered when selecting a business organizational type? Select all that apply.
a. Taxation
b. Transferability of ownership
c. Expense of creating the organizational type
d. Your liability and risk
3. Control of a sole proprietorship belongs entirely to the owner, who also assumes full risk of the business.
a. True
b. False
4. Which of the following is true about a general partnership?
a. Owners are subject to “pass-through” taxation
b. Owners are personally liable for the debts of the business
c. A partnership is a tax-reporting entity, not a tax-paying entity
d. Both a. and b.
e. All three: a., b., and c.
5. Which of the following is true about a limited liability company (LLC)?
a. LLC owners are subject to “pass-through” taxation
b. LLC owners are called shareholders
c. An LLC is a hybrid business entity sharing characteristics of both a corporation and a partnership
(or sole proprietorship)
d. Both a. and c.
e. Both b. and c.
6. Which of the following is true about a corporation?
a. A corporation is created under the laws of a state
b. Corporation owners are called property-holders
c. A corporation one of the simpler forms of business organization
d. Both a. and b.
e. Both a. and c
