The Choice of Ownership Form for Pooled Equity Investments Can

question 1

Multiple Choice

The choice of ownership form for pooled equity investments can also depend on the desire to avoid personal liability. Which of the following ownership structures suffers from the major disadvantage of unlimited liability for all investors?

• A) C Corporation
• B) Subchapter S Corporation
• C) General Partnership
• D) Limited Partnership

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Definitions:

Consolidation

The act of combining multiple entities, assets, or processes into a single, more effective and efficient structure.

Liabilities

Financial obligations or debts that a company or individual owes, which are recorded on the balance sheet and must be settled over time.

Assets

Resources with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.

Subsidiary Corporation

A corporation wholly owned by another corporation (the parent corporation).