Chapter 1, Problem 6E

To determine

Concept Introduction:

There are different types of business organizations available. The people choose the type of business organizations according to the attributes of the business.

The attributes of business are −

	Proprietorship	Partnership	Corporation	LLC
Number of owners	Only 1 owner	2 or more people termed as parts	1 or more. They are termed as stockholders	1 or more. They are termed as members
Business taxation	No additional business income tax	No additional business income tax	Additional business income tax	No additional business income tax
Owner Liability	Unlimited Liability	Unlimited Liability	Limited Liability	Limited Liability
Legal entity	Not a separate legal entity	Not a separate legal entity	A separate legal entity with same rights	A separate legal entity with same rights
Business Life	Business ends with the death of owner or by his choice	Business ends with the death of partners or by their choice	Indefinite	Indefinite

Whether each description best refers to a sole proprietorship, partnership, corporation and LLC.

The given descriptions are −

1. Micah and Nancy own Financial services, which pays a business income tax, Micah and Nancy do not have personal responsibility for the debts of Financial Services
2. Riley and Kay own Speedy Packages, a courier service. Both are personally liable for the debts of the business.
3. IBC Services does not have a separate legal existence apart from the person who owns it.
4. Trent Company is owned by Trent Malone, who is personally liable for the debts of the company.
5. Ownership of Zander Company is divided into 1000 shares of stock. The company pays a business income tax.
6. Physio Products does not pay income taxes and one owner. The owner has unlimited liability for business debt
7. AJ Company pays a business income tax and has two owners
8. Jeffy Auto is a separate legal entity from its owners, but it does not pay business income tax