5types of Business Structure

This exam mainly focuses on the 5 different types of business structures and their specifics.

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20 questions

Kimray Walter Quimpang

•about 6 years ago

Question 1

Multiple Choice

10 points

Which of the following is NOT part of the disadvantages of an LLC.

A.Double taxation of profits.

B.Limited life, when a member dies the LLC dissolves.

C.Cannot issue shares/stock

D.LLCs cannot go public

Question 2

Multiple Choice

10 points

Which of the following is NOT part of the disadvantages of a C-Corporation.

A.Double taxation of profits.

B.Do not have liability protection.

C.States have higher fees.

D.States charge annual franchise fees.

Question 3

Multiple Choice

10 points

Which of the following is NOT part of the disadvantages of an S-Corporation.

A.Only one class of stock is permitted

B.Limited to a maximum of 100 shareholders.

C.You will not have exclusive rights to your business name.

D.Stockholders types are limited

Question 4

Multiple Choice

10 points

Which of the following is NOT part of the disadvantages of a Nonprofit.

A.Subject to stricter reporting requirements.

B.Benefits arising out of the nonprofit organization cannot be for personal benefit.

C.In case, the incorporators pull out, they cannot obtain the assets of the nonprofit.

D.Limited life, when an owner dies the Nonprofit dissolves.

Question 5

Multiple Choice

10 points

Which of the following is NOT part of the disadvantages of a DBA.

A.You do not have liability protection.

B.You will be personally liable for the debts of your business.

C.You will not have exclusive rights to your business name.

D.Subject to stricter reporting requirements.

Question 6

Multiple Choice

10 points

Which of the following is NOT part of the advantages of an LLC.

A.Easy to transfer ownership.

B.Protection against liability.

C.LLCs don’t need to hold board meetings.

D.LLCs don’t have to keep records of all their meetings.

Question 7

Multiple Choice

10 points

Which of the following is NOT part of the advantages of a C-Corporation.

A.Protection against liability

B.Corporations don’t need to hold board meetings.

C.Corporations have perpetual lifetimes.

D.Corporations can get an unlimited number of investors.

Question 8

Multiple Choice

10 points

Which of the following is NOT part of the advantages of an S-Corporation.

A.Protection against liability.

B.Easy to transfer ownership.

C.Certain expenses are not tax-deductible.

D.S Corporations avoid double taxation.

Question 9

Multiple Choice

10 points

Which of the following is NOT part of the advantages of a Nonprofit.

A.Tax-Exempt Public and Private Donations

B.Protection against liability.

C.The nonprofit has perpetual lifetimes.

D.Shares of stock can be sold.

Question 10

Multiple Choice

10 points

Which of the following is NOT part of the advantages of a DBA.

A.Low filing fees.

B.DBA does not have the ongoing record keeping requirements and other formalities.

C.Operates under any name other than its owner's personal name, or the name that was filed with the state.

D.Protection against liability.

Question 11

Multiple Choice

10 points

The owner(s) of this type of business structure is called "Members."

A.Corporation

B.Non-Profit

C.LLC

D.DBA

Question 12

Multiple Choice

10 points

A business entity that legally exists separately from its owner(s). The owners of a corporation are called ____________.

A.Board of Directors

B.Managers

C.Officers

D.Shareholders

Question 13

Multiple Choice

10 points

This principle allows all business profits, losses, and expenses accounted for by its individual members. This allows the avoidance of double taxation by way of corporate tax payment along with the individual income tax.

A.Tax Exemption

B.Pass-through taxation

C.501(c)(3) Exemption

D.S-Corp Election

Question 14

Multiple Choice

10 points

A key document used by LLCs because it outlines the business' financial and functional decisions including rules, regulations, and provisions. Once the document is signed by the members of the limited liability company, it acts as an official contract binding them to its terms.

A.Operating Agreement

B.Amendment

C.Articles of Organization

D.Purpose and Dissolution clauses

Question 15

Multiple Choice

10 points

This is a status given by the IRS to allow Nonprofit corporations to become tax-exempt. It also allows the Nonprofit to accept donations from the public.

A.510(c)(3) status

B.501(c)(3) status

C.501(3)(c) status

D.S Corp Election

Question 16

Multiple Choice

10 points

What are the 3 different formal leadership positions of a Corporation?

A.Owner, President, Shareholder.

B.President, Secretary, Treasurer.

C.Owner, Member, Manager.

D.Shareholder, Director, Officer.

Question 17

Multiple Choice

10 points

All Corporations are filed with the state as C Corporations, the S Corporation title is assigned by filing the _________ with the IRS. The IRS gives a 75-day deadline after formation to filing this form.

A.2335 form

B.3552 form

C.2553 form

D.S Corp Election

Question 18

Multiple Choice

10 points

A special type of business structure, which exists to provide certain benefits to organizations that have the main goal of serving the public. They are able to raise capital through acquiring special grants.

A.LLC

B.Corporation

C.DBA

D.NonProfit

Question 19

Multiple Choice

10 points

A business that operates under any name other than its owner's personal name, or the name that was filed with the state.

A.Corporation

B.DBA

C.NonProfit

D.LLC

Question 20

Multiple Choice

10 points

Elected by the shareholders and make major business decisions in a manner that will be in the best interest of the company’s investors. They also supervise the company’s officers.

A.Director

B.Members

C.Managers

D.President