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Unformatted text preview: Chapter 14 - Formation and Operation of Business Organizations ANSWERS TO REVIEW QUESTIONS AND PROBLEMS - CHAPTER 14 1. Forms of Business Organizations (a) The three traditional business organizations are the sole proprietorship, the general partnership, and the corporation. Hybrid forms include the limited partnership, the S corporation, the limited liability company, and the limited liability partnership. (b) “Closely-held” applies to organizations that have a relatively small number of owners. “Publicly-held” is used to describe organizations that have hundreds, if not thousands, of owners. FACTORS TO CONSIDER WHEN SELECTING A BUSINESS’S ORGANIZATIONAL FORM 2. Creation Creation, as a factor, usually relates to the cost of forming a business organization. Typically this cost is not of major importance unless the businesspeople have very little money to begin a business. 3. Continuity All business owners should take into consideration the relationship between the ownership of a business organization and the business being conducted. Sometimes the owner’s participation in the business is not essential for success. Under such circumstances,...
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- Spring '07