#1
Which of the following is a characteristic of a sole proprietorship?
Single ownership
ExplanationOwned and operated by one individual.
#2
What is a disadvantage of a sole proprietorship?
Difficulty in raising capital
ExplanationLimited ability to attract investment or obtain loans.
#3
Which of the following is a characteristic of a limited liability partnership (LLP)?
Limited liability for all partners
ExplanationAll partners have limited liability for the partnership's debts.
#4
What is the main advantage of a sole proprietorship?
Ease of formation
ExplanationSimple and straightforward to establish with minimal regulatory requirements.
#5
Which of the following is a characteristic of a partnership?
Single ownership
ExplanationOwnership shared between two or more individuals or entities.
#6
What is a disadvantage of a partnership?
Difficulty in raising capital
ExplanationLimited ability to attract investment compared to corporations.
#7
In a general partnership, who bears unlimited liability?
All partners
ExplanationEach partner is personally liable for debts and obligations.
#8
Which type of partnership allows partners to have limited liability?
Limited liability partnership
ExplanationPartners have limited liability for the actions of the partnership and other partners.
#9
What is a 'silent partner' in a partnership?
A partner who does not participate in the management of the business
ExplanationInvests capital but does not engage in day-to-day operations.
#10
In a limited partnership, who bears unlimited liability?
Only managing partners
ExplanationNon-managing partners have limited liability.
#11
What is the main difference between a general partnership and a limited partnership?
Liability of partners
ExplanationIn a general partnership, all partners have unlimited liability; in a limited partnership, only some partners have unlimited liability.
#12
Which type of partnership is often formed by professionals such as lawyers or accountants?
Limited liability partnership
ExplanationDesigned to provide partners with limited liability and flexibility in management.
#13
Which of the following is an advantage of a partnership?
Ease of formation
ExplanationSimple and inexpensive to establish compared to other business structures.
#14
What is a joint partnership?
A partnership formed by two or more parties for a specific project
ExplanationTemporary partnership for a particular endeavor or project.
#15
Which type of partnership typically has partners with specialized skills or expertise?
Limited liability partnership
ExplanationAttracts professionals who wish to combine their skills without exposing themselves to personal liability for the actions of other partners.
#16
In a limited partnership, what is the role of limited partners?
They only contribute capital and have limited liability
ExplanationLimited partners invest capital but have no involvement in managing the business.
#17
What is the main difference between a limited partnership and a limited liability partnership (LLP)?
Liability of partners
ExplanationIn a limited partnership, some partners have unlimited liability, while in an LLP, all partners have limited liability.