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Are the following statements True or False?
1)A general partnership must have at least 2 members with each having their potential financial
loss in the partnership limited to their individual investment. False
2)The owner of a sole proprietorship has unlimited liability for the company’s debt.
3)A corporation is considered a separate legal entity from its shareholders.
4)Once a corporation has paid taxes on its income, it can be passed on as tax-free dividends to its
shareholders.
Solution
1)True since it needs to have a minimum of 2 members and share profits and loss based on
proportion of investment
2)True since he is the only owner needs to share everything
3)True
4)False , the shareholders also needs to pay taxes on the dividend received

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