Title: Competency Assessment: (CU3 M1) Answer Key
Course: SkillsCom BA 260 15.0 > Section: Credit Unit 3 Module 1- Factors in Launching New Ventures

Answers are provided at the end of each bullet. Note to grader: Student need only give one answer ( ie either sole proprietor, partnership, LLC or corporation) for each of the numbered bullets below

Legend

S= Sole proprietor

P= Partnership

L = LLC

C = corporation

* = S Corporation

ADVANTAGES

1. Limited liability C, * L
2. Sole ownership of profits S
3. Unlimited life C * L
4. Ease of formation S, P
5. Flexibility S, P
6. Transfer of ownership C * L
7. Relative freedom from governmental control S, P L
8. Increased ability and expertise C * L
9. Compared to an an S corporation, this structure has tax advantages S P L
10. Compared to an S corporation, this structure has fewer restrictions on ownership S P L
11. Combines aspects of a sole proprietor and a corporation *

Disadvantages

1. Unlimited liability S, P
2. Governmental regulation C *
3. Lack of continuity S, P
4. Double taxation C
5. Difficulty obtaining large sums of capital S, P
6. Organizing expenses C *
7. Relatively limited viewpoint and experience S
8. Activity restrictions C
9. Annual reporting requirements C

Part C:  Answers:

1. T

2. C

3. P

4. C

5. T

6. T

7. C

8. T

9. C

10.C

11.T

12.C

13.T

14.P

15.P