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Sample Quiz 1

Now that you’ve completed Business Basics 1, it’s time to put your knowledge to the test! Let’s take a quick quiz to reinforce what you’ve learned and ensure you’re ready to apply these foundational concepts to your business. This is your chance to solidify your understanding and set yourself up for even greater success as an entrepreneur. Let’s dive in!

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Question 1 of 3

Maria and Sam are planning to open a bakery called Sweet Success. They have limited startup funds and want a structure with minimal paperwork to begin operations quickly. However, they are taking out a loan to purchase equipment, and they’re worried about losing personal assets if the business faces financial trouble. They also hope to expand to additional locations in a few years. Which business structure would best align with their needs? 

A

Sole Proprietorship, because it’s the easiest and fastest to set up.

B

General Partnership, because they can share responsibilities equally.

C

Limited Liability Company (LLC), because it offers liability protection and flexibility for growth

D

S Corporation, because it avoids corporate-level taxation.

Question 2 of 3

Alex has developed a tech platform under the business name InnovateX. He’s seeking significant outside investment to scale the business globally. Investors are interested but insist on a formal structure that allows them to own shares. Alex also wants to ensure that the business structure won’t limit the number of investors or the ability to transfer ownership in the future. What business structure should Alex choose? 

A

S Corporation, because it limits investor liability and avoids double taxation.

B

Limited Liability Company (LLC), because it provides liability protection and pass-through taxation.

C

C Corporation, because it allows for unlimited investors and easy transfer of shares.

D

General Partnership, because it enables investors to be directly involved in management decisions.

Question 3 of 3

Lila and Jordan operate a consulting firm, Strategic Minds. They started as an LLC because it offered flexibility and personal liability protection. Now, they want to expand their business by bringing in an additional partner to manage new projects. The partner is willing to invest but prefers limited involvement in daily operations and minimal liability exposure. What would be the most appropriate structure for their updated needs?

A

General Partnership, because it allows shared ownership and decision-making.

B

Limited Partnership (LP), because it accommodates a partner with limited involvement and liability.

C

C Corporation, because it formalizes ownership and allows for unlimited partners.

D

Sole Proprietorship, because it keeps their operational setup simple.

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