b10chap5 - 9/16/2011 Chapter 5: How to Form Form a Business...

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9/16/2011 1 Chapter 5: How to Form a Business a. C Corporations b. Partnerships c. Sole proprietorships d. S Corporations e. Limited Liability Companies
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9/16/2011 2 True or False? If a sole proprietorship fails, the owner may lose whatever was invested in the business; was invested in the business; however, the owner’s personal assets are not at risk. True or False? In a sole proprietorship, profits are passed along to the owner. For tax purposes, these profits are accounted for with any other personal income the owner may have earned and taxed at the owner's personal income tax rate. True or False? Sole proprietors often find it difficult to compete with large firms for expert talent. Large firms can usually pay better and offer fringe benefits that are unaffordable to the sole proprietor.
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9/16/2011 3 True or False? All partners in a general partnership have limited liability for the debts of their firm . True or False? In a general partnership, all partners are entitled to an equal share of the firm’s profits . True or False? A recent study showed that partnerships are more likely to fail than sole proprietorships .
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9/16/2011 4 True or False? One advantage of a partnership is that there is a simple process for partners to terminate their business . True or False? Compared to sole proprietorships, an advantage of partnerships is their ability to obtain more financial resources . True or False? Compared to sole proprietorships, partnerships offer the advantage of shared offer the advantage of shared management and pooled knowledge .
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9/16/2011 5 True or False? A limited partnership refers to a partnership set up for a temporary purpose such as a temporary purpose, such as a real estate development project .
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b10chap5 - 9/16/2011 Chapter 5: How to Form Form a Business...

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