Entities and Business Structures (Video)

Question-and-answer flashcards covering sole proprietorships, partnerships, corporations (C and S), LLCs, limited partnerships, nonprofits, and ownership concepts.

What is a sole proprietorship?

One owner; no legal protection; easy to set up; typically for smaller businesses.

How many owners are required for a partnership, and what is the liability situation?

At least two owners; can be more; generally no legal protection; partners may be liable for each other’s obligations.

Do partnerships provide legal protection?

Generally no; partners can be personally liable for partnership obligations.

What is a corporation?

An entity with shareholders; the benchmark of the class; a separate legal entity.

Who owns a corporation?

Shareholders (stockholders).

What is a C corporation and why is it emphasized in this course?

The typical corporation for large businesses; most publicly traded companies are C corporations.

What is an S corporation?

Another type of corporation with different tax treatment; mentioned for completeness.

What is an LLC?

Limited liability company; a separate entity; not a corporation; provides liability protection; a hybrid of partnership and corporation.

How is an LLC different from a corporation?

An LLC is not a corporation; it blends partnership-like flexibility with limited liability protection.

What is a limited partnership?

A partnership with some liability protection for certain partners.

What distinguishes nonprofit entities from for-profit entities?

No owners; goal is to help people; profits reinvested to support the mission rather than distributed to owners.

If the class assumes everything is a corporation, what does that imply about ownership?

There are shareholders who own the corporation.

What are common examples of corporations with stockholders?

Walmart, Kohl's, Tesla, Ford, General Motors; they are corporations with shareholders.