Chapter 1

Question 1

Solo proprietorship

Answer 1

A business owned by a single individual

Question 2

Partnership

Answer 2

An association of two or more individual joining together as co-owners to operate a business for profit

Question 3

General partnership

Answer 3

A partnership in which all partners are fully liable for the indebtedness incurred by the partnership

Question 4

Limited partnership

Answer 4

A partnership in which one or more of the partners has limited liability, restricted to the amount of capital he or she invests int he partnership

Question 5

Corporation

Answer 5

An entity that legally functions separate and apart from its owners

Question 6

S-corporation

Answer 6

A corporation that, because of specific qualifications, is taxed as though it were a partnership

Question 7

Limited liability company

Answer 7

A cross between a partnership and a corporation under which the owners retain limited liability but the company is run and is taxed like a partnership