Question

The basic concepts of financial management are the same for all businesses, regardless of how their organized. However, a firms legal structure affects its operations. The main forms of business organizations are: 1) proprietorships, 2) partnerships, 3) corporations, and 4) limited liability companies (LLCs) and limited liability partnerships (LLPs). In terms of numbers, most businesses are ______.

a) proprietorships
b) partnerships
c) corporations
d) limited liability companies/partnerships

Answer 1

The majority of businesses, in terms of numbers, are proprietorships, which are easy to establish, allow full control to the owner, and require minimal legal arrangements.

Step-by-step explanation:

When comparing the main forms of business organizations, which include proprietorships, partnerships, corporations, and limited liability companies (LLCs) and limited liability partnerships (LLPs), most businesses in terms of numbers are proprietorships. This is due to the ease of setting up a sole proprietorship, as it can be established by any individual with a business idea or opportunity and does not require any special legal arrangements or taxes beyond income tax on the profits. This form of business organization allows the owner full control and the ability to take all the decisions, though it also comes with the responsibility of assuming all the risks.