4 Businesses and Organizations

Determine the basic structure and tax forms oflegal entities.

Which of the following scenarios correctly describes a nonprofit organization?

Sally and her salon are treated the same from a legal perspective.

Bernie is protected from liability for anything beyond his $5,000 investment.

Mike's shoe store does not sell stocks that are publicly traded.

Lonnie uses the profits of his organization to advance its mission.

Which of the following scenarios correctly describes an LLC?

The shares of Jose's retail business cannot be purchased or traded publicly

When filing taxes for his gardening business, Pierre uses an 1120S form.

Kim is not held personally responsible for the liabilities of her bakery.

Jeff uses a 990 form when filing taxes for his employer's organization.

Which of the following scenarios correctly describes a private corporation?

Craig's sporting goods store does not allow investors to purchase or publicly trade shares.

Jessica is liable for the total $10,000 invested in her company, but she is not accountable for her partner's behavior.

Brian's company does not pay taxes, but it reinvests income to meet its objectives.

LaShonda and her company are treated the same from a legal perspective.