Question 1

A comparison of the three major forms of business ownership shows that sole proprietorships are usually the most difficult type of business to establish.

Accepted Answer

A) True 
 B)False

Question 2

A __________is a federally or provincially chartered legal entity with authority to act and to have liability separate from its owners.

Accepted Answer

A) non-profit organization 
B) limited partnership 
C) general partnership 
D) corporation 
A) non-profit organization 
B) limited partnership 
C) general partnership 
D) corporation

Question 3

Many franchisors have rules that prohibit franchisees from sponsoring their own websites.

Accepted Answer

A) True 
 B)False

Question 4

When one of the owners of a corporation dies,the corporation legally ceases to exist.

Accepted Answer

A) True 
 B)False

Question 5

One of the major disadvantages of a sole proprietorship is the:

Accepted Answer

A) unlimited liability the owner has for the debts of the firm. 
B) possibility of disagreements between owners. 
C) fact that any income earned by this type of business is taxed twice. 
D) high cost of starting or ending the company. 
A) unlimited liability the owner has for the debts of the firm. 
B) possibility of disagreements between owners. 
C) fact that any income earned by this type of business is taxed twice. 
D) high cost of starting or ending the company.

Question 6

One of the major advantages of a franchise system is the franchisee often gets instant recognition from consumers.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements about the operation of a corporation is correct?

Accepted Answer

A) A corporate charter automatically expires in 99 years and must be renewed if the corporation wants to remain in business. 
B) Owners of a corporation have unlimited liability for any claims against their company. 
C) A corporation tends to be much easier to set up than a sole proprietorship or partnership. 
D) A corporation receives its charter from the federal or a provincial government. 
A) A corporate charter automatically expires in 99 years and must be renewed if the corporation wants to remain in business. 
B) Owners of a corporation have unlimited liability for any claims against their company. 
C) A corporation tends to be much easier to set up than a sole proprietorship or partnership. 
D) A corporation receives its charter from the federal or a provincial government.

Question 8

A disadvantage of corporations is that an owner must get the approval of all other owners before selling his or her interest in the firm to another investor.

Accepted Answer

A) True 
 B)False

Question 9

All public corporations must file annual reports.

Accepted Answer

A) True 
 B)False

Question 10

Starting a new business as a sole proprietorship:

Accepted Answer

A) requires retaining the services of an attorney. 
B) is usually simpler and less expensive than starting other forms of ownership. 
C) is simple,but the proprietorship fee is very expensive in some provinces. 
D) is very similar to starting a business as a corporation. 
A) requires retaining the services of an attorney. 
B) is usually simpler and less expensive than starting other forms of ownership. 
C) is simple,but the proprietorship fee is very expensive in some provinces. 
D) is very similar to starting a business as a corporation.

Question 11

The most popular international target for Canadian-based franchises is:

Accepted Answer

A) The United States 
B) China 
C) India 
D) The European Common Market 
A) The United States 
B) China 
C) India 
D) The European Common Market

Question 12

Owners/shareholders in a public corporation have no control over the daily operations.

Accepted Answer

A) True 
 B)False

Question 13

Jamie and Maria invested all their savings in a small pizzeria they opened outside the University of Western Ontario.They operated the business as a general partnership.After 11 months the business went broke and Jamie and Maria were left with outstanding bills of $37,500,which is more than their investment in the company.Jamie and Maria can:

Accepted Answer

A) lose only the funds they originally invested in their company. 
B) lose their personal assets as the result of their company's financial problems. 
C) lose only the total value of the assets actually used to operate the business. 
D) avoid any liability for these debts since a partnership is considered to be a business entity that is separate and distinct from the partners who own it. 
A) lose only the funds they originally invested in their company. 
B) lose their personal assets as the result of their company's financial problems. 
C) lose only the total value of the assets actually used to operate the business. 
D) avoid any liability for these debts since a partnership is considered to be a business entity that is separate and distinct from the partners who own it.

Question 14

Which of the following is normally considered a major disadvantage of the corporate form of business?

Accepted Answer

A) difficult transfer of ownership. 
B) unlimited liability of owners. 
C) limited life. 
D) double taxation of earnings. 
A) difficult transfer of ownership. 
B) unlimited liability of owners. 
C) limited life. 
D) double taxation of earnings.

Question 15

Stockholders in a corporation have limited liability for the debts of the corporation.

Accepted Answer

A) True 
 B)False

Question 16

Global franchising is unlikely to experience major growth due to convenience and predictable levels of service.

Accepted Answer

A) True 
 B)False

Question 17

Once a business is established,it's almost impossible to change from one form of business ownership to another.

Accepted Answer

A) True 
 B)False

Question 18

Few brick-and-mortar franchisees are expanding online.

Accepted Answer

A) True 
 B)False

Question 19

Midas Muffler sells its business name and the rights to its products to prospective business persons who want to use the Midas name and offer Midas products.In this arrangement,Midas would be the __________,and the buyer of these rights is the ____________.

Accepted Answer

A) owner;limited partner 
B) wholesaler;retailer 
C) co-signer;co-signee 
D) franchisor;franchisee 
A) owner;limited partner 
B) wholesaler;retailer 
C) co-signer;co-signee 
D) franchisor;franchisee

Question 20

A major advantage of sole proprietorships is that an owner has limited liability for the debts of his or her business.

Accepted Answer

A) True 
 B)False

A comparison of the three major forms of business ownership shows that sole proprietorships are usually the most difficult type of business to establish.

A __________is a federally or provincially chartered legal entity with authority to act and to have liability separate from its owners.

Many franchisors have rules that prohibit franchisees from sponsoring their own websites.

When one of the owners of a corporation dies,the corporation legally ceases to exist.

One of the major disadvantages of a sole proprietorship is the:

One of the major advantages of a franchise system is the franchisee often gets instant recognition from consumers.

Which of the following statements about the operation of a corporation is correct?

A disadvantage of corporations is that an owner must get the approval of all other owners before selling his or her interest in the firm to another investor.

All public corporations must file annual reports.

Starting a new business as a sole proprietorship:

The most popular international target for Canadian-based franchises is:

Owners/shareholders in a public corporation have no control over the daily operations.

Which of the following is normally considered a major disadvantage of the corporate form of business?

Stockholders in a corporation have limited liability for the debts of the corporation.

Global franchising is unlikely to experience major growth due to convenience and predictable levels of service.

Once a business is established,it's almost impossible to change from one form of business ownership to another.

Few brick-and-mortar franchisees are expanding online.

Midas Muffler sells its business name and the rights to its products to prospective business persons who want to use the Midas name and offer Midas products.In this arrangement,Midas would be the ,and the buyer of these rights is the __.

A major advantage of sole proprietorships is that an owner has limited liability for the debts of his or her business.

The Dynamic Business Environment

How Economic Issues Affect Business

Competing in Global Markets

The Role of Government in Business Appendix a Working Within the Legal Environment of Business

Ethics and Social Responsibility

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Producing World-Class Goods and Services

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employeemdashmanagement Issues and Relations

Marketing: Helping Buyers Buy

Managing the Marketing Mix: Product, Price, Place, and Promotion

Understanding Accounting and Financial Information

Financial Management Appendix C Managing Risk

The Financial Services Industry in Canada

Filters

Exam 6: Forms of Business Ownership

A comparison of the three major forms of business ownership shows that sole proprietorships are usually the most difficult type of business to establish.

A __________is a federally or provincially chartered legal entity with authority to act and to have liability separate from its owners.

Many franchisors have rules that prohibit franchisees from sponsoring their own websites.

When one of the owners of a corporation dies,the corporation legally ceases to exist.

One of the major disadvantages of a sole proprietorship is the:

One of the major advantages of a franchise system is the franchisee often gets instant recognition from consumers.

Which of the following statements about the operation of a corporation is correct?

A disadvantage of corporations is that an owner must get the approval of all other owners before selling his or her interest in the firm to another investor.

All public corporations must file annual reports.

Starting a new business as a sole proprietorship:

The most popular international target for Canadian-based franchises is:

Owners/shareholders in a public corporation have no control over the daily operations.

Which of the following is normally considered a major disadvantage of the corporate form of business?

Stockholders in a corporation have limited liability for the debts of the corporation.

Global franchising is unlikely to experience major growth due to convenience and predictable levels of service.

Once a business is established,it's almost impossible to change from one form of business ownership to another.

Few brick-and-mortar franchisees are expanding online.

Midas Muffler sells its business name and the rights to its products to prospective business persons who want to use the Midas name and offer Midas products.In this arrangement,Midas would be the __________,and the buyer of these rights is the ____________.

A major advantage of sole proprietorships is that an owner has limited liability for the debts of his or her business.

The Dynamic Business Environment

How Economic Issues Affect Business

Competing in Global Markets

The Role of Government in Business Appendix a Working Within the Legal Environment of Business

Ethics and Social Responsibility

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Producing World-Class Goods and Services

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employeemdashmanagement Issues and Relations

Marketing: Helping Buyers Buy

Managing the Marketing Mix: Product, Price, Place, and Promotion

Understanding Accounting and Financial Information

Financial Management Appendix C Managing Risk

The Financial Services Industry in Canada

Filters

Midas Muffler sells its business name and the rights to its products to prospective business persons who want to use the Midas name and offer Midas products.In this arrangement,Midas would be the ,and the buyer of these rights is the __.