IUPUI BUS X100 EXAM 2 2025
QUESTIONS AND ANSWERS
Sole Proprietorship - ....ANSWER ...-business owned and operated by one
person
(advantage: no double taxation)
partnership - ....ANSWER ...-a voluntary agreement under which two or
more people act as co-owners of a business for profit
corporation - ....ANSWER ...-a legal entity that is separate and distinct from
its owners (shields the owners from personal liability) (advantage: stock)
General Partnership - ....ANSWER ...-partnership in which partners share
equally in both responsibility and liability
limited partnership - ....ANSWER ...-A partnership with one or more general
partners and one or more limited partners (limited partners do less and have less
liability).
S corporation - ....ANSWER ...-A unique government creation that looks
like a corporation but is taxed like sole proprietorships and partnerships
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
,C Corporation - ....ANSWER ...-The most common type of corporation,
which is a legal business entity that offers limited liability (separate from the
owners) to all of its owners, who are called stockholders
corporation advantages - ....ANSWER ...-limited liability, ease of transfer of
ownership, perpetual life, external sources of funds, expansion potential, easier to
separate management from ownership
Corporation Disadvantages - ....ANSWER ...--double taxation
-cost of setup and report filing (paperwork!)
-difficulties in terminating corporation
-possible conflicts between management and board
-double taxation (c-corp only)
Limited Liability Company (LLC) - ....ANSWER ...-a form of business
ownership that offers both limited liability to its owners and flexible tax treatment
-protects like a corporation
-taxed like a partnership (or a corp)
-no eligibility requirements for investments
-fewer administrative tasks and less record keeping than a corp
LLC corporation characteristics - ....ANSWER ...--limited personal liablity
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
, -corporation taxation
-few ownership limitations
-stock
LLC partnership characteristics - ....ANSWER ...--no stock
-no articles of organization
-fewer reporting requirements
-less paperwork than corporations
S corporation vs LLC - ....ANSWER ...-S corp is a tax classification that
provides liablity protection and passes income through to owners. Limited Liability
company is a structured business entity that helps shield owners from litigation
-biggest difference: LLC is less paperwork!
personal liability - ....ANSWER ...-individual responsibility and
accountability for actions or omissions
Sole Proprietorship Advantages - ....ANSWER ...-Ease of start-up and
closure
Pride of ownership
Retention of all profits
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 3
QUESTIONS AND ANSWERS
Sole Proprietorship - ....ANSWER ...-business owned and operated by one
person
(advantage: no double taxation)
partnership - ....ANSWER ...-a voluntary agreement under which two or
more people act as co-owners of a business for profit
corporation - ....ANSWER ...-a legal entity that is separate and distinct from
its owners (shields the owners from personal liability) (advantage: stock)
General Partnership - ....ANSWER ...-partnership in which partners share
equally in both responsibility and liability
limited partnership - ....ANSWER ...-A partnership with one or more general
partners and one or more limited partners (limited partners do less and have less
liability).
S corporation - ....ANSWER ...-A unique government creation that looks
like a corporation but is taxed like sole proprietorships and partnerships
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
,C Corporation - ....ANSWER ...-The most common type of corporation,
which is a legal business entity that offers limited liability (separate from the
owners) to all of its owners, who are called stockholders
corporation advantages - ....ANSWER ...-limited liability, ease of transfer of
ownership, perpetual life, external sources of funds, expansion potential, easier to
separate management from ownership
Corporation Disadvantages - ....ANSWER ...--double taxation
-cost of setup and report filing (paperwork!)
-difficulties in terminating corporation
-possible conflicts between management and board
-double taxation (c-corp only)
Limited Liability Company (LLC) - ....ANSWER ...-a form of business
ownership that offers both limited liability to its owners and flexible tax treatment
-protects like a corporation
-taxed like a partnership (or a corp)
-no eligibility requirements for investments
-fewer administrative tasks and less record keeping than a corp
LLC corporation characteristics - ....ANSWER ...--limited personal liablity
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
, -corporation taxation
-few ownership limitations
-stock
LLC partnership characteristics - ....ANSWER ...--no stock
-no articles of organization
-fewer reporting requirements
-less paperwork than corporations
S corporation vs LLC - ....ANSWER ...-S corp is a tax classification that
provides liablity protection and passes income through to owners. Limited Liability
company is a structured business entity that helps shield owners from litigation
-biggest difference: LLC is less paperwork!
personal liability - ....ANSWER ...-individual responsibility and
accountability for actions or omissions
Sole Proprietorship Advantages - ....ANSWER ...-Ease of start-up and
closure
Pride of ownership
Retention of all profits
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 3
