Question 1

Hans is considering forming a company that specializes in international consultations. He wants to serve as a liaison between domestic and Chinese toy distributors, offering the U.S. firms access to lower cost labor and offering the Chinese firms access to one of the largest markets in the world. In addition, he will need to capitalize the operation by offering shares of common stock. Which business entity should he choose?

an LLC

a corporation

an LLP

a sole proprietorship

Question 2

Good friends, Bernie Samples and Susan Randle each studied accounting in college. Recently they decided to work together as co-owners of a small accounting firm. This is an example of

corporation.

limited liability corporation.

sole proprietorship.

partnership.

Question 3

Susan Boyle is the owner of a piano tuning business. As a sole proprietor, any profit she earns is 

treated as personal income of Susan Boyle.

tax free.

taxed twice, once as a business and then taxed again as Susan Boyle’s income.