Business Organizations – Georgio’s Fashions is a business established in Little Rock, Arkansas. In each of the following situations, determine whether Georgio’s is a sole proprietorship, a general partnership, a limited partnership, a limited liability company, or a corporation.
a. Georgio’s is owned by four people. When Georgio’s defaults on a payment to a supplier, each of the four owners is personally liable for payment of the debt.
b. Georgio’s raises $200,000 through the sale of shares of its stock.
c. Georgio’s is owned by one person who is personally liable for all of the business’s debts.
d. At tax time, Georgio’s files a tax return with the IRS and pays taxes on the firm’s net profits, and Georgio’s shareholders (owners) each pay personal income tax on dividends received from Georgio’s.
e. Georgio’s is owned by three people. Two of Georgio’s owners are not allowed to participate in the firm’s management, while the third owner manages the business and assumes liability for all of Georgio’s debts.
f. Georgio’s is owned by two people and was created informally, by an unwritten agreement between these two owners.
g. At tax time, Georgio’s can choose whether to be taxed as a corporation or as a partnership.
h. Georgio’s is owned by one person who is NOT personally liable for the debts of the business.
Georgio’s is either a _______________________ or a _________________________