Forms of business organization: A business can be started in any form of business organization. The form of business organization can be a sole proprietorship, a general partnership , a limited partnership, a limited liability partnership, S corporation, a corporation or a limited liability company. To choose: The correct type of the organization
Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.
Chapter 1, Problem 1SEQ
To determine
Concept Introduction:
Forms of business organization: A business can be started in any form of business organization. The form of business organization can be a sole proprietorship, a general partnership, a limited partnership, a limited liability partnership, S corporation, a corporation or a limited liability company.
To choose:
The correct type of the organization
Expert Solution & Answer
Answer to Problem 1SEQ
D. Corporation
Explanation of Solution
Explanation for correct answer:
A Corporation has a separate legal entity and its owners own shares in its capital. Hence the correct answer is D.
Explanation for incorrect answers:
A. A proprietorship does not have a separate legal entity. Hence this option is not correct.
B. A service business does not necessarily have a separate legal entity. Hence this option is not correct.
C. A partnership does not have a separate legal entity. Hence this option is not correct.
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Compare and contrast the three major forms of business organization which are sole proprietorship, partnership and corporation. Also, relate the scope of the role of a financial manager within these business organization.
Of the following forms of business organization, which have stockholders with limited liability?
a) limited partnerships
b) partnerships
c) corporations
d) proprietorships
In accounting, an economic entity may be defined as-
a. a business enterprise c. an individualb. a division within a business enterprise d. any of these