2.

You come across different kinds of businesses every day. The following table describes some businesses. Using the description of each business, classify it as a proprietorship, a partnership, a corporation, an income trust, or a limited liability partnership. Business Scenario Type of Business Rock Inc. is a mineral mining company. The CEO of Rock Inc. recently died. The news led to a short-term decline in the company's stock price, but it bounced back after the company announced its quarterly earnings. Purple Consulting has five consultants in the firm. The company's annual revenue is around $500,000. Income is distributed among all consultants, and each is personally liable for claims if the company goes under. Trigon invests exclusively in commercial real estate and until recently paid little or no corporate tax. Trigon's goal is to maximize the distribution of free cash flow to investors in a tax-efficient manner. Selena and Mario run a law firm in Edmonton. The firm has debt of $100,000, but Selena and Mario will not be held personally liable for the law firm's debt. William founded and operated a wedding planning agency, which specialized in celebrity weddings. When he died, his business was dissolved because there was no plan for control after his death. LLP Proprietorship Partnership Corporation Different forms of businesses have different characteristics. Which of the following characteristics would apply to a proprietorship? Check all that apply. O Subject to lower income taxes O Subject to unlimited liability O Has unlimited life Can easily raise large amounts of capital Owned by single individual Less regulated