Entrepreneurship 1 
Section 8 Study Questions (15.0 points) Answer each question fully. Complete sentences are not necessary. Lesson 1 (3.0 points) 1. What is liability, and what does it mean to have personal liability for a company? (0.5 points)
Liability is the authorized word for being alleged responsible as well as compelled to complete a commitment. If you attain a personal liability for a company, this means that you can be held personally responsible for your company; including financial obligation as well as illegal actions your company may perform.
2. What are taxes, and what is the IRS? (0.5 points)
A tax is a financial obligation that is mandatory by law for an individual to pay. The IRS is the Internal Revenue Service, where all taxes are gathered by a government organization. 3. What is a pass-through entity? (0.5 points)
Some business structures are taxed by the way of pass-through entities. These businesses are not taxed as an individual entity. 4. What are the four main legal structures for a business in the United States? (0.5 points)
Sole Proprietorship
Partnership
Corporation
Limited Liability Company (LLC) 5. Which of those structures protect your personal liability? (0.5 points)
Corporations, being the main one, but also LLC structures could possibly protect your personal liability. 6. Which of those structures offer pass-through taxation? (0.5 points)
Sole proprietorships & partnerships offer pass-through taxation.
Lesson 2 (3.0 points) 1. What is a C corporation? (0.5 points)
C Corporation is the typical kind of corporation; it shields the liability of its proprietors, but obtains double taxation. 2. What is an S corporation, and how is it different from a C corporation? (0.5 points)
S Corporation is a corporation that attains specific tax status and not all companies can attain this status. This tax status is the largest difference between S Corporations and C Corporations. 3. What is a nonprofit corporation, and how
Liability is the authorized word for being alleged responsible as well as compelled to complete a commitment. If you attain a personal liability for a company, this means that you can be held personally responsible for your company; including financial obligation as well as illegal actions your company may perform.
2. What are taxes, and what is the IRS? (0.5 points)
A tax is a financial obligation that is mandatory by law for an individual to pay. The IRS is the Internal Revenue Service, where all taxes are gathered by a government organization. 3. What is a pass-through entity? (0.5 points)
Some business structures are taxed by the way of pass-through entities. These businesses are not taxed as an individual entity. 4. What are the four main legal structures for a business in the United States? (0.5 points)
Sole Proprietorship
Partnership
Corporation
Limited Liability Company (LLC) 5. Which of those structures protect your personal liability? (0.5 points)
Corporations, being the main one, but also LLC structures could possibly protect your personal liability. 6. Which of those structures offer pass-through taxation? (0.5 points)
Sole proprietorships & partnerships offer pass-through taxation.
Lesson 2 (3.0 points) 1. What is a C corporation? (0.5 points)
C Corporation is the typical kind of corporation; it shields the liability of its proprietors, but obtains double taxation. 2. What is an S corporation, and how is it different from a C corporation? (0.5 points)
S Corporation is a corporation that attains specific tax status and not all companies can attain this status. This tax status is the largest difference between S Corporations and C Corporations. 3. What is a nonprofit corporation, and how