Businesses can be classified into the following forms: a proprietorship, a partnership, a corporation, a limited liability company (LLC), and a limited liability partnership (LLP).

Different forms of businesses have different characteristics. Which of the following characteristics would apply to a partnership? Check all that apply.

Taxed at individual level

Income is allocated on a pro rata basis

Chartered by a state and is its own entity separate from its owners

Legal arrangement between two or more people

Can easily raise large amounts of capital

Subject to unlimited liability

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 sole proprietorship, a partnership, a corporation, or a limited liability company/limited liability partnership.

Business Scenario	Type of Business
Anthony started a tutoring website. After a few months, a publishing company filed a lawsuit against his company for copyright infringement. Anthony had to shut down his business and lost all his personal assets in the process.
Sachit and his friend Shirley run a carpet cleaning business. They distribute the profits proportionately and file their individual taxes.
Jack, the CEO of a beverage company, is required to certify the accuracy of information provided in the companys quarterly reports.
Jack, Sachit, and Jose own an accounting firm in San Francisco. All share in the profits of the firm proportionately and file taxes at an individual level. According to their agreement, none of the owners will be held personally liable for the accounting firms debt.	Businesses in the form of corporations offer their owners several advantages, but the benefits come at a price. For instance, corporations are required to create a charter, set bylaws, and file mandatory reports with state and federal authorities, which can get expensive and time consuming. The filing document, which requires the company to state: (1) the name of the proposed corporation, (2) types of activities the company will be involved in, (3) amount of capital stock, (4) number of directors, and (5) names and addresses of the directors, is called the corporate . Grade It Now Save & Continue Continue without saving