Exam 6: Business Formation: Choosing the Form That Fits

Scoopjoe, an ice cream brand in Wisconsin, has ten other outlets in Illinois, Michigan, and Ohio. As part of the agreement between Scoopjoe's main outlet and the other outlets, the former not only supplies raw materials to the latter but also provides help with site selection, training of staff, and finance. The given scenario exemplifies a:

The owner of a sole proprietorship must share any after-tax profits with the company's shareholders.

Which of the following statements is true of stockholders of corporations?

A group of five people wants to start a limited liability company (LLC) in their city. The group files a document with the state government to establish the existence of the LLC. In this scenario, which of the following documents is filed by the group?

Which of the following is a characteristic of limited liability companies (LLCs)?

Glossamer Inc., a company owned by George and Alex, faces huge debts and is eventually shut down due to bankruptcy. The company's financial loss affects Alex personally, and his house and other personal assets are seized by the bank. However, George's personal assets are not affected. This is most likely because George is a(n) _____.

FoodieGo, a catering company, is owned by foreign investors and local businessmen. Its earnings are equally divided among its members. It does not face the problem of double taxation as taxes are only levied on the personal income of the members. The owners of FoodieGo do not have personal liability for any debts incurred by the company. In the given scenario, FoodieGo is an example of a _____.

Choice of ownership determines the degree to which each owner has personal liability for the firm's debts.

A corporation is a separate entity from its owners where the:

Briefly explain the process of forming a C Corporation.