GB 5-1: Forms of Business Ownership

A or D -->Limited liability

Municipal corporations do not usually engage in international business activities.

A OR D --> Unlimited liability

A OR D --> A difficult creation process

A cooperative is an example of a government-owned corporation.

A or D --> Potential disagreement among owners

The earnings of a corporation may be taxed twice.

A or D --> Unlimited life of the company

A OR D --> Owner keeps all profits

A or D --> Business can dissolve suddenly

Nonprofit corporations provide a service but do not try to make a profit.

Partners have unlimited liability & may be personally responsible for the debts of the business

A or D --> Double taxation of earnings

Limited liability means that stockholders can lose their investment if the corporation fails.

Like nonprofit corporations, cooperatives do not make profits.

Compared to a partnership, a corporation is fairly easy to create.

A or D --> Availability of specialized management

Only a few businesses in the United States are organized as a sole proprietorship.

One way to raise money to operate a corporation is to sell portions of ownership to the public.

A OR D --> Limited sources of funds

A OR D --> Ease of starting

A OR D --> Availability of different talents