Exhibit 3.1. Prevalence and Profits of the Three Forms of Business Ownership

Sole proprietorships are the most common type of business in the US, accounting for 73 percent of all enterprises. However, corporations account for 70 percent of the profits earned by US businesses.

COMPREHENSION QUESTIONS

1. What is the economic entity assumption? What does this assumption require?

2. What are the three basic forms of business enterprises?

3. What is a sole proprietorship? Why is it the most common type of business in the United States?

4. List five advantages and four disadvantages of forming a sole proprietorship.

5. What is a partnership? Is it a separate legal entity?

6. Explain the difference between a general partnership, a limited partnership, and a master limited partnership.

7. Speak on advantages and disadvantages of a partnership.

8. What is a corporation? Why is it considered a separate legal entity?

9. What legal rights do corporations have?

10. Delineate the three groups that govern a corporation and describe the role of each.

11. What are major types of corporations?

12. John Brown is the owner of a successful baking company. Recently his business has been increasing and John has been thinking about changing the organization of his business from a proprietorship to a corporation. Discuss some of the advantages John would enjoy if he were to incorporate his business.