Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 15, Problem 1TP
While sole proprietorships and corporations are the most popular forms of business organization, the limited liability company (LLC) is a close third. Limited liability companies are treated like
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Compare the potential for agency problems in sole proprietorships, partnerships, and corporations. In light of your analysis, why is the corporate form of organizations so popular?
1.What are the main advantages of proprietorships, partnerships, and limited liability companies?
2.What are the disadvantages of a partnership over a limited liability company form of organization for a profit-making business?
Businesses can be classified into the following forms: sole proprietorship, partnership, corporation, limited liability company (LLC), and limited liability partnership (LLP).
Different forms of businesses have different characteristics. Which of the following characteristics would apply to a limited liability company and a limited liability partnership? Check all that apply.
LLPs are not suitable for professional firms such as accounting, law, and architecture
Limited financial liability
Taxed as a partnership
Have corporate ownership structure
Owned by single individual
Owners have limited liability and right to vote
Chapter 15 Solutions
Principles of Accounting Volume 1
Ch. 15 - A partnership ________. A. has one owner B. can...Ch. 15 - Any assets invested by a particular partner in a...Ch. 15 - Which of the following is a disadvantage of the...Ch. 15 - Mutual agency is defined as: A. a mutual agreement...Ch. 15 - Chani contributes equipment to a partnership that...Ch. 15 - Juan contributes marketable securities to a...Ch. 15 - Which one of the following would not be considered...Ch. 15 - A well written partnership agreement should...Ch. 15 - What type of assets may a partner not contribute...Ch. 15 - How does a newly formed partnership handle the...
Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - When a partnership dissolves, the first step in...Ch. 15 - When a partnership dissolves, the last step in the...Ch. 15 - Prior to proceeding with the liquidation, the...Ch. 15 - Does a partnership pay income tax?Ch. 15 - Can a partners personal assets in a limited...Ch. 15 - Can a partnership assume liabilities as part of...Ch. 15 - Does each partner have to contribute an equal...Ch. 15 - What types of bases for dividing partnership net...Ch. 15 - Angela and Agatha are partners in Double A...Ch. 15 - On February 3, 2016 Sam Singh invested $90,000...Ch. 15 - Why do partnerships dissolve?Ch. 15 - What are the four steps involved in liquidating a...Ch. 15 - When a partner withdraws from the firm, which...Ch. 15 - What is the first step in a partnership...Ch. 15 - When a partnership liquidates, do partners get...Ch. 15 - Coffee Partners decides to close due to the...Ch. 15 - On May 1, 2017, BJ and Paige formed a partnership....Ch. 15 - The partnership of Chase and Chloe shares profits...Ch. 15 - The partnership of Tasha and Bill shares profits...Ch. 15 - Cheese Partners has decided to close the store. At...Ch. 15 - The partnership of Michelle, Amal, and Maureen has...Ch. 15 - The partnership of Tatum and Brook shares profits...Ch. 15 - Arun and Margot want to admit Tammy as a third...Ch. 15 - When a partnership is liquidated, any gains or...Ch. 15 - The partnership of Magda and Sue shares profits...Ch. 15 - The partnership of Arun, Margot, and Tammy has...Ch. 15 - Match each of the following descriptions with the...Ch. 15 - While sole proprietorships and corporations are...Ch. 15 - A partnership is thriving. The three partners get...
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Similar questions
- Which of the following legal forms of organization is most expensive to organize? O corporations O limited partnership O sole proprietorships O partnershipsarrow_forwardBased on the advantages and disadvantages of each of the following forms of businesses, give an example of a business that would be best suited to that particular form. Be sure to explain why that is the best option for the particular business. (1) Sole proprietorship (2) Limited partnership (3) Corporation (4) Limited Liability Companyarrow_forwardWhat are the advantages of operating a business as a partnership rather than as a corporation? What are the disadvantages?arrow_forward
- Answer the following question in your own words: Explain the following corporate structures. Limited Liability Company (LLC) Joint Stock Company General Joint Stock Company (SAOG) Joint Venture Holding Company Commercial Agentarrow_forwardDecide which of the following statements are true. I. In most circumstances, the owners of corporations enjoy reduced liability, increased liquidity and greater growth potential than owners of other forms of business. II. The term "LLC" or "Limited Liability Company", is a corporation that elects to limit liability for its shareholders through the use of off-shore and special purpose entities. II. The corporate form of business can help shield its owners from the liabilities of the corporation. Select one: O a. One is true. O b. Two are true. O C. All are true. O d. All are false.arrow_forward1) why would you choose an LLC form over partnership or an S-corporation? 2) what role should social media play in your marketing strategy?arrow_forward
- Identifying advantages and disadvantages of a corporation Following is a list of advantages and disadvantages of the corporate form of business. Identify each quality as either an advantage or a disadvantage. Ownership and management are separated. The entity has a continuous life. Transfer of ownership is easy. Stockholders’ liability is limited. Exposure to double taxation is evident. The entity can raise more money than a partnership or sole proprietorship. Government regulation is expensive.arrow_forwardQuestion-based on forming a business. I have tried it but incorrect answer. Numbers 2 and 3 are incorrect.arrow_forwardWhat are the main advantages of (a) proprietorships, (b) partnerships, and (c) limited liability companies?arrow_forward
- Refer to Chapter 11-1A, page 619: Characteristics of sole proprietorships, partnerships, and corporations Required The three primary types of business organization are proprietorship, partnership, and corporation. Each type has characteristics that distinguish it from the other types. In the left column of the following table write the name of the type of business organization that is most likely to possess the characteristic that is described in the right column of the table. The first item is shown as an example. Business Type Characteristic Proprietorship Owned and operated by a single individual Subject to double taxation Has a retained earnings account on its balance sheet One owner may be held personally liable for actions taken on behalf of the business by different owner Profits benefit a single individual Frequently uses legal agreements to define profit distribution for two or more owners Most highly regulated form of business The business dissolves with the death of its only…arrow_forwardIdentifying advantages and disadvantages of a corporation Following is a list of advantages and disadvantages of the corporate form of business. Identify each quality as either an advantage or a disadvantage. a. Ownership and management are separated. b. Entity has continuous life. c. Transfer of ownership is easy. d. Stockholders’ liability is limited. e. Exposure to double taxation is evident. f. Entity can raise more money than a partnership or sole proprietorship. g. Government regulation is expensive.arrow_forwardInvestors are more willing to put money into limited liability companies than partnerships because: The US government reimburses shareholders for any losses from investing in limited liability companies. Partnerships require a close relationship with other entrepreneurs. Partnerships are limited to a maximum of two investors. Only their investment in the company is at risk if the business fails.arrow_forward
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