Author Question: List and describe any two forms of business ownership.[br][br][b][color=#A83E49]Question ... (Read 92 times)

awywial · **on:** Jul 14, 2018

List and describe any two forms of business ownership.

Question 2

Unlimited liability means
A) there is no limit on the amount an owner can borrow.
B) creditors will absorb any loss from nonpayment of debt.
C) the business can borrow money for any type of purchase.
D) the owner is responsible for all business debts.
E) stockholders can borrow money from the business.

polinasid · **Reply #1 on:** Jul 14, 2018

Answer to Question 1

A corporation is a business entity created by filing a form (known in most states as the articles of incorporation) with the appropriate state agency, paying the state's incorporation fees, and meeting other requirements. The specifics vary among states. Unlike a sole proprietorship or a partnership, a corporation is considered to be a legal entity that is separate and distinct from its owners. Because of a corporation's status as a separate legal entity, the owners of a corporation have limited liability-meaning they aren't personally responsible for the debts and obligations of their company.
A limited liability company (LLC) is a hybrid form of business ownership that is similar in some respects to a corporation while having other characteristics that are similar to a partnership. Like a corporation, a limited liability company is considered a legal entity separate from its owners. Also like a corporation-and as its name implies-an LLC offers its owners limited liability for the debts of their business. But it offers more flexibility than a corporation in terms of tax treatment; in fact, one of the most interesting characteristics of an LLC is that its owners can elect to have their business taxed either as a corporation or a partnership. Many states even allow individuals to form single-person LLCs that are taxed as if they were sole proprietorships.

Answer to Question 2

D