CTD 328 EXAM 2 QUESTIONS AND
ANSWERS 100% CORRECT
Sole Proprietorship - ANSWER-One Owner working alone
Easiest to Establish
Residential Design
Handles all Design Services, Marketing, Management, Business Functions, etc.
Earns Profits & Inherits Losses
Must be Focused & Determined
Long hours
General Partnership - ANSWER-Two or more Owners; Co-Owners
Typically owners compliment each other
Percentage Share of each owner
Limited Partnership - ANSWER-Statutory Agreement filed with State
More Expensive to Form
General Partner(s) & Investor(s)
Investor's do not have say in Business
Run by the General Partner(s)
Limited Liability Company (LLC or LC) - ANSWER-Combo of Sole Proprietorship,
Limited Partnership, Corporation
Owners called Members
Organized under State Law
Name includes LLC or LC
Liability limited to Members Investment
Corporation - ANSWER-Time Consuming & Expensive
Statutory Requirements - Articles of Incorporation & Board of Officers
Annual Meeting
Organized under State Law
Own Entity, separate from Members
May have Stockholders (Investors)
Legally & Financially separate from any Owners
Liability limited to Members Investment
S Corporation - ANSWER-Similar to Corporation except pays no Taxes
LLC's mostly replaced S Corporation**
Organized under State Law
Exists as own Entity, separate from Members
Requires Articles of Incorporation & Board of Officers
Annual Meeting
, May have Stockholders (Investors)
Legally & Financially separate from any Owners
Liability limited to Members Investment
Entrepreneurial - ANSWER-Simple, Unelaborated Structure
Principal makes all Decisions
No Standardization
Organized around Principal
Principal has all the Power
Responsive to Dynamic Environment
Single Focus limits ability to deal with Complexity
Overly Dependent on Principal
Beuracratic - ANSWER-Formal, Machine-Like Structure
Highly Formal, Centralized Decision Making
Highly Standardized Activities
Separation of Functions
Works best in Stabilized Environment
Power Based on Position
Inflexible, Difficult to Change
Stifles Creativity
Accountant - ANSWER-Helps with Financial Issues
Types of Services: Bookkeeping, Financial Planning, Prepare Income Taxes, Office
Management, Assist in Acquiring Loans, Sales Tax Liabilities, IRS Representation
Banker - ANSWER-Business Guidance
Loan Advice & Generation
Commercial Checking Account
Types of Services: Credit Card Assistance, Credit Checking of Clients, Cash
Management, Line of Credit, Investment Services
Capital - ANSWER-- Wealth in form of money or assets, ex. used to start a company
- Start-Up Funding, Business Loans, Creditors, Commercial Banks & Finance
Companies, Equity Capital , Angel Investor
Commercial Banks & Finance Companies - ANSWER-- this is where you'd receive a
loan from
Long-Term Loans: More than One Year, Capital Items
Short-Term Loans: One Year or Less, Line of Credit
Considered Unsecured
Creditors - ANSWER-- person or company to which money is owed
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