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The common forms of business organization are proprietorship, partnership, corporation,

The common forms of business organization are proprietorship, partnership, corporation, or limited liability corporation.

A proprietorship is owned by one individual. More than 70% of the businesses in the United States are organized as proprietorships. The popularity of this form. is due to the ease and the low cost of organizing. The primary disadvantage of proprietorships is that the financial resources available to the business are limited to the individual owner,5 resources. Small local businesses such as hardware stores, repair shops, laundries, restaurants, and maid services are often organized as proprietorships.

As a business grows and more financial and managerial resources are needed, it may become a partnership. A partnership is owned by two or more individuals. Like proprietorships, small local businesses such as automotive repair shops, music stores, beauty salons, and clothing stores may be organized as partnerships. Currently, about 10% of the businesses in the United States are organized as partnerships.

A corporation is organized under state or federal statues as a separate legal taxable entity. The ownership of a corporation is divided into shares of stock. A corporation issues the stocks to individuals or other businesses,who then become owners or stockholders of the corporation.

A primary advantage of the corporate form. 15 the ability to obtain large amounts of resources by issuing stock.For this reason,most companies that require large investments in equipment and facilities are organized as corporations.About 20%of the businesses in the United States are organized as corporations.Given that most large companies are organized

As corporations, over 90% of the total dollars of business receipts are received by corporations.Thus,corporations have a major influence on the economy.

Al limited liability corporation combines attributes of a partnership and a corporation in that it 15 organized as a corporation,but it can elect to be taxed as a partnership.Thus,its owners'(or members')liability is limited to their investment in the business,and its income is taxed when the owners report it on their individual tax returns.

Now choose the best sentence(A,B,C or D)for each question.

15.Most businesses in America are organized as proprietorships due to the reason that______.

A. it is owned by one individual

B. it is easy and cheap to organize them

C. the financial resources available to the business are limited

D. small local businesses are organized as proprietorships

16. The difference between a proprietorship and a partnership is that______.

A. a partnership is organized under state or federal statues

B. a proprietorship has the ability to obtain large amounts of resources

C. a partnership has two or more owners while a proprietorship has only one

D. a proprietorship is more welcomed by businesses

17. The corporate form. is quite suitable for companies that______.

A. need large investments in equipment and facilities

B. obtain large amounts of resources

C. have to issue the stocks to others

D. belong to separate legal taxable entities

18. Which of the following organizations has a major influence on the economy?

A. Proprietorships.

B. Partnerships.

C. Corporations.

D. Limited liability corporations.

19. A limited liability corporation has the following features except______.

A. it has the attributes of both a partnership and a corporation.

B. it is organized as a corporation.

C. it can be taxed as a partnership.

D. its owners are liable for all the failures.

20. According to the passage, which of the following is not true?______.

A. Proprietorship, partnership, corporation and limited liability corporation are common forms of business organizations.

B. Most business receipts are received by limited liability corporations.

C. Corporations issue stocks to individuals or businesses, who then become their owners.

D. The owners of limited liability corporations should be taxed.

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