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Unformatted text preview: 5 Student: _______________________________________________________________________________________ True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False 1. The corporation is the most common form of business ownership. 2. The three major forms of business ownership in the U.S. are sole proprietorships, partnerships, and corporations. 3. Few people today start their own business. 4. Once a business is established, it's almost impossible to change from one form of business ownership to another. 5. When two or more people legally agree to become co-owners of a business, the form of business is called a partnership. 6. A legal entity with authority to act and have liability separate from its owners is called a partnership. 7. Corporations represent 20 percent of all the businesses in the U.S. and earn 81 percent of the total U.S. business receipts. 8. A comparison of the three major forms of business ownership shows that sole proprietorships are usually the most difficult type of business to establish. 9. The first step in starting a sole proprietorship is to fill out a proprietorship charter application form and file it with the state government. 10. It is usually easy to start and end a sole proprietorship. 11. The profits of a sole proprietorship are taxed as the personal income of the owner. 12. The sole proprietorship form of ownership tends to be attractive to people who want to invest in a company without taking an active role in management. 13. A major advantage of sole proprietorships is that an owner has limited liability for the debts of his or her business. 14. One of the strengths of the sole proprietorship is its ability to sustain rapid growth by raising large amounts of financial resources. 15. The debts of a business operated as a sole proprietorship are considered to be the personal debts of the owner of the business. 16. A drawback of sole proprietorships is that they usually have limited access to additional financial resources. 17. An advantage of forming a sole proprietorship is that it allows the owner to have more time for leisure activities. 18. If a sole proprietorship fails, the owner may lose whatever was invested in the business, however, the owner's personal assets are not at risk. 19. If the business is designated a sole proprietorship, profits are passed along to the owner. For tax purposes, these profits are accounted for True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False True False with any other personal income the owner may have accumulated and taxed at the owner's personal income tax rate....
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This note was uploaded on 10/17/2011 for the course BUS BUS300 taught by Professor Na during the Spring '11 term at American River.

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