Business Organizations and Structures

Question 1

LLC (limited liability company)

Answer 1

A business structure combining limited liability with pass-through taxation, protecting owners from personal liability

Question 2

Sole Proprietorship

Answer 2

A business owned by one person with full responsibility for debts and obligations

Question 3

Partnership

Answer 3

A business owned by two or more people, sharing responsibility and liability

Question 4

General Partnership

Answer 4

All partners have equal responsibility and unlimited liability

Question 5

Limited Partnership

Answer 5

Includes both general partners and limited partners

Question 6

Limited Liability Partnership

Answer 6

A partnership where all partners have limited liability, protecting them from personal responsibility for business debts

Question 7

Corporation

Answer 7

A separate legal entity from its owners, offering limited liability protection

Question 8

C-Corporation

Answer 8

Taxed separately from owners, potentially leading to double taxation

Question 9

S-Corporation

Answer 9

Profits pass through to owners’ tax returns, avoiding corporate tax

Question 10

Joint Venture

Answer 10

A business arrangement when two or more parties combine resources for a specific project

Question 11

Nonprofit Organization

Answer 11

A business that operates for a charitable or public purpose, exempt from income taxes

Question 12

B-Corp

Answer 12

A for-profit corporation that meets social and environmental standards while benefitting shareholders

Question 13

Cooperative

Answer 13

A business owned and operated for the benefit of its members, who share control and profits

Question 14

Franchise

Answer 14

A business where a franchisee operates under a franchisor’s brand and system, paying fees and royalties

Question 15

Piercing the Corporate Veil

Answer 15

Holding shareholders personally liable for corporate actions due to misuse of the corporate entity

Question 16

Articles of Incorporation

Answer 16

A document filed to legally create a corporation, detailing its purpose and structure

Question 17

Operating Agreement

Answer 17

A document outlining the management and operational procedures of an LLC

Question 18

Bylaws

Answer 18

Internal rules for managing a corporation, including shareholder and director duties

Question 19

Shareholders/Stockholders

Answer 19

Individuals or entities owning shares in a corporation, with rights to vote and receive dividends