Why is an owner's choice of the form of business organization a critical decision?
A) It determines financial liability for the business.
B) It determines whether the business may have employees.
C) It determines where the organization may conduct its operations.
D) It determines whether funds can be borrowed to finance operations.

Question

Quizplus · Accepted Answer

The form of business organization (such as sole proprietorship, partnership, corporation) significantly impacts the owner's financial liability. For example, sole proprietors and general partners have unlimited personal liability for business debts, while shareholders of a corporation typically have limited liability. This choice does not directly determine the ability to have employees, where the business can operate, or the ability to borrow funds, as those aspects can be influenced by other factors regardless of the business structure.

Why Is an Owner's Choice of the Form of Business