Forms Of Business Ownership Trivia Quiz

Credit Unions are an example of a cooperative because they are financial institutions owned and operated by their members. Members pool their resources to provide financial services to each other, such as savings accounts, loans, and other financial products. The cooperative structure ensures that the interests of the members are prioritized, and any profits are returned to the members in the form of lower fees and better rates.

The statement is false because the death of a corporate owner does not cause the corporation to cease to exist. A corporation is a separate legal entity from its owners, and it can continue to operate even if the owner passes away. The ownership of the corporation may be transferred to the owner's heirs or beneficiaries according to the laws and provisions set in place.

Non-profit corporations are exempt from paying taxes on their profits. This is because they operate for charitable, educational, or social purposes, and their earnings are reinvested back into their mission rather than distributed to shareholders or owners. The exemption from taxes allows non-profit organizations to allocate more resources towards their designated cause and maximize their impact on society.

The main disadvantage of being a sole proprietor is unlimited liability. This means that the owner is personally responsible for all debts and liabilities of the business. If the business fails or faces legal issues, the owner's personal assets can be at risk. Unlike other business structures, such as corporations or limited liability companies, there is no legal separation between the owner and the business, exposing the owner to potential financial loss.

A sole proprietorship is taxed only once because it is not considered a separate legal entity from its owner. The income and expenses of the business are reported on the owner's personal tax return, and the owner is responsible for paying taxes on the business profits. This means that the business itself does not pay separate taxes, resulting in a single level of taxation.

A disadvantage of a franchise is the high cost to purchase. Franchises often require a significant upfront investment to buy into the business model and brand. This can be a barrier for potential franchisees who may not have the financial resources to afford the initial purchase. The high cost to purchase a franchise can limit opportunities for individuals who are interested in owning a franchise but cannot afford the upfront expenses.

A partnership provides the advantage of having access to more capital and money. This means that the partners can pool their resources together, contributing more funds to the business. This increased capital can be used for various purposes such as investing in new equipment, expanding operations, or funding marketing campaigns. By having access to more capital and money, a partnership can have a stronger financial position and greater opportunities for growth and success.

When a business is incorporated, it becomes a separate legal entity from its owners. This means that the owners, also known as shareholders, have limited liability for the debts and obligations of the company. In other words, their personal assets are protected and they are only liable for the amount they have invested in the company. This is one of the main advantages of incorporating a business, as it provides a level of financial protection for the owners. Therefore, the statement "Being incorporated provides limited liability for its owners" is true.

The statement "A partnership is made up of 2 people" is false. A partnership is a business structure that involves two or more individuals or entities coming together to carry out a business venture. It does not necessarily have to be limited to only two people. Partnerships can have multiple partners, each contributing to the business with their skills, resources, and expertise. Therefore, the statement is incorrect.

A sole proprietorship is a business structure where an individual is the sole owner and operator of the business. In this type of business, the owner has complete control over decision-making and enjoys all the profits generated by the business. This form of business is suitable for individuals who want to have full autonomy and retain all the profits for themselves.