Future Business Leaders of America (FBLA) Entrepreneurship Practice Test

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Prepare for the FBLA Entrepreneurship Test with our quiz. Use flashcards and multiple-choice questions to enhance your knowledge and readiness for the exam. Achieve success with comprehensive study materials!

Practice this question and more.

Which one of the following forms of business typically carries the least risk to the owner?

Limited Partnership
Sole Proprietorship
Corporation
General Partnership

The correct answer is: Corporation

The corporation form of business carries the least risk to the owner primarily due to the principle of limited liability. In a corporation, the business is considered a separate legal entity from its owners (shareholders). This means that the personal assets of the owners are protected from the liabilities and debts incurred by the corporation. If the corporation faces lawsuits or financial losses, the owners are typically only at risk of losing their investment in the company and are not personally liable for the corporation's obligations. This structural design encourages investment and can provide a level of financial security for entrepreneurs, making corporations a desirable option for business owners who wish to minimize personal risk. In contrast, other forms of business such as sole proprietorships, general partnerships, and limited partnerships do not provide this same degree of protection, leaving owners more vulnerable to personal liability for business debts and legal issues.