CBAD 344: Final Exam:) questions well
answered to pass
Sole Proprietorship (business organization category) - correct answer ✔✔Business with 1 owner only,
anyone else in the business is an employee.
Advantages:
- Makes all the decisions.
- Gets all the profits.
- No tax on the business itself, no real costs of foundation.
Disadvantages:
- Only yourself for decision-making.
- Profit financial assets are limited with you first begin.
- Business automatically terminated at death of proprietor.
- No liability protection at all(lots of exposure).
- If a lawyer/CPA aids a client toward.
this organization, they are committing mount practice.
General Partnership(business organization category) - correct answer ✔✔Business owned by 2 or more
parties.
Advantages:
- Very flexible partnership.
- Inexpensive
- All partners have an equal voice.
- No government report/fees.
- Not taxable, and combined financials/talent.
Disadvantages:
- Every partner owes it money(debt), so if 2 of the partners are gone, the 1 owes it all.
- Decisions can be hard if there are a lot parties.
, - Death, withdrawal, or bankruptcy can cause partnership to terminate.
- Partners may have to pay tax on earning accumulated by firm but not distributed.
Limited Partnership(business organization category) - correct answer ✔✔A partnership with 2 very
distinct groups of ownership.
Group 1: general partners- put the business together and run it. Usually a few people.
Group 2: limited partners- inventors who bought into the business. Not the decision-makers. Can be any
amount of people. Liability exposure is worse on this end. (very popular recently)
Advantages:
- Same basic advantages as a general partnership.
- Limited partners are not personally liable for debts and claims against the firm.
- General partnerships cannot lose control even if they do, they do not have the majority ownership of
the firm.
- Limited partnership shares are easily transferable.
Disadvantages:
- Agreement must be in writing and on file.
- Limited partners do not have the authority for decisions.
- Incur federal regulatory status if partnership is publicly traded.
Traditional Corporation(business organization category) - correct answer ✔✔Created by an act of state
government and creating something that is a brand new entity. Get to own property, etc. (best choice for
a big business)
Advantages:
- Separate legal entity which can own property, sue or be sued, and exist totally separate from its
owners.
- Ability to raise large amounts of money through sales of stock.
- Hierarchy of management and decision-making suitable for a business with much older.
- No liability for debts of claims against cooperation.
- Tax advantages, pension plans, and profit sharing.
Disadvantages:
- Subject to annual fees and reports to government.
answered to pass
Sole Proprietorship (business organization category) - correct answer ✔✔Business with 1 owner only,
anyone else in the business is an employee.
Advantages:
- Makes all the decisions.
- Gets all the profits.
- No tax on the business itself, no real costs of foundation.
Disadvantages:
- Only yourself for decision-making.
- Profit financial assets are limited with you first begin.
- Business automatically terminated at death of proprietor.
- No liability protection at all(lots of exposure).
- If a lawyer/CPA aids a client toward.
this organization, they are committing mount practice.
General Partnership(business organization category) - correct answer ✔✔Business owned by 2 or more
parties.
Advantages:
- Very flexible partnership.
- Inexpensive
- All partners have an equal voice.
- No government report/fees.
- Not taxable, and combined financials/talent.
Disadvantages:
- Every partner owes it money(debt), so if 2 of the partners are gone, the 1 owes it all.
- Decisions can be hard if there are a lot parties.
, - Death, withdrawal, or bankruptcy can cause partnership to terminate.
- Partners may have to pay tax on earning accumulated by firm but not distributed.
Limited Partnership(business organization category) - correct answer ✔✔A partnership with 2 very
distinct groups of ownership.
Group 1: general partners- put the business together and run it. Usually a few people.
Group 2: limited partners- inventors who bought into the business. Not the decision-makers. Can be any
amount of people. Liability exposure is worse on this end. (very popular recently)
Advantages:
- Same basic advantages as a general partnership.
- Limited partners are not personally liable for debts and claims against the firm.
- General partnerships cannot lose control even if they do, they do not have the majority ownership of
the firm.
- Limited partnership shares are easily transferable.
Disadvantages:
- Agreement must be in writing and on file.
- Limited partners do not have the authority for decisions.
- Incur federal regulatory status if partnership is publicly traded.
Traditional Corporation(business organization category) - correct answer ✔✔Created by an act of state
government and creating something that is a brand new entity. Get to own property, etc. (best choice for
a big business)
Advantages:
- Separate legal entity which can own property, sue or be sued, and exist totally separate from its
owners.
- Ability to raise large amounts of money through sales of stock.
- Hierarchy of management and decision-making suitable for a business with much older.
- No liability for debts of claims against cooperation.
- Tax advantages, pension plans, and profit sharing.
Disadvantages:
- Subject to annual fees and reports to government.
