Look through the sentences and decide which of them are True (T), False (F).

Date: 2015-10-07; view: 572.

a) The most common forms of organising a business are sole proprietorship, partnership, corporation and S corporation.

b) b) The simplest structure is the sole proprietorship, which usually involves just two people who own and operate the enterprise.

c) Selecting the sole proprietorship business structure doesn't mean you are personally responsible for your company's liabilities.

d) There are two kinds of partnerships: general partnerships and limited partnerships.

e) A limited partnership includes only general partners.

f) One of the main disadvantages of a partnership is the tax treatment it enjoys.

g) Personal liability is a major concern if you use a general partnership to build your business.

h) A corporation requires complying with more regulations and tax requirements.

i) If a businessman organises a corporation he risks to lose the money.

j) Corporation continues to operate even after the death of its owner.

2) Choose the best answer to complete the following sentences.

a) The most important decision you make when setting up a business is_______ you select for your company.

1. the staff

2. the type of legal structure

b) You will want to make your selection carefully and choose the best structure for your business's needs because _______.

1. each business form has different tax consequences

2. each business form comes with different number of people involved

c) If you decide to start your business as a sole proprietorship _______.

1. be ready to pay a lot

2. be sure you notify the IRS and your state tax agency

d) The tax aspects of a sole proprietorship are appealing because _______.

1. the expenses and the income from the business are included on your personal income tax return

2. the expenses and your income from the business are excluded from your personal income tax return

e) You use Schedule SE to calculate _______.

1. the amount self-employment tax you owe

2. how much debt you owe

f) With a sole proprietorship, your business earnings are taxed _______.

1. in four equal amounts throughout the year on the 15th of April, June, September and January

2. one time a year

g) Banks and other financing sources _______ to make business loans to sole proprietorships.

1. aren`t eager

2. would like

h) The general partners own and operate the business and assume liability for the partnership, while the limited partners _______.

1. can`t operate the business single-handed

2. only give money

i) Remember that partnerships are also more expensive to establish than sole proprietorships because _______.

1. the procedure demands more legal and accounting services

2. they require attorney services

j) Another minus to forming a corporation: owners of the corporation pay _______.

1. a double fine

2. bigger tax on the business's earnings