Question 1

The management team of a new venture:

Accepted Answer

A) is encouraged to operate the business as a sideline. 
B) must operate the business full-time. 
C) can expect to draw a large salary. 
D) should be employed elsewhere to assure adequate income. 
A) is encouraged to operate the business as a sideline. 
B) must operate the business full-time. 
C) can expect to draw a large salary. 
D) should be employed elsewhere to assure adequate income. B

Question 2

Identify the nine areas an entrepreneur should consider in choosing a legal form of organization.

Accepted Answer

ownership
liability
start-up costs
continuity
transferability of interest
capital requirements
management control
distribution of profits
attractiveness for raising capital

Question 3

Discuss the six main functions of a board of directors.

Accepted Answer

Reviewing operating and capital budgets
Developing longer-term strategic plans for growth and expansion
Supporting day-to-day activities
Resolving conflicts among owners or shareholders
Ensuring the proper use of assets
Developing a network of information sources for the entrepreneurs

Question 4

The corporation is considered a legal person that is taxable and absorbs liability.

Accepted Answer

A) True 
 B)False

Question 5

In what form of business is it most difficult to change your taxable year?

Accepted Answer

A) sole proprietorship 
B) partnership 
C) corporation 
D) LLP 
A) sole proprietorship 
B) partnership 
C) corporation 
D) LLP

Question 6

In which form of organization would it be possible for individuals that don't have any ownership stake in the business to make decisions?

Accepted Answer

A) Sole proprietorship 
B) Limited partnership 
C) General partnership 
D) Corporation 
A) Sole proprietorship 
B) Limited partnership 
C) General partnership 
D) Corporation

Question 7

Since a corporation is recognized as a separate tax,it has the advantage of being able to take many deductions and expenses that are not available to the proprietorship or partnership.

Accepted Answer

A) True 
 B)False

Question 8

The sole proprietorship form of ownership gives owners the most control of business operations.

Accepted Answer

A) True 
 B)False

Question 9

When hiring employees for the venture,the entrepreneur should consider the candidate's skills and abilities and avoid considering the individual's personality.

Accepted Answer

A) True 
 B)False

Question 10

The design of the organization will be the entrepreneur's formal and explicit indication to the members of the organization as to what is expected of them.Typically these expectations can be grouped into five areas,identify and describe them.
A.Organization structure.This defines members' jobs and the communication and relationship these jobs have with each other.These relationships are depicted in an organization chart.
B.Planning,measurement,and evaluation schemes.All organization activities should reflect the goals and objectives that underlie the venture's existence.The entrepreneur must spell out how these goals will be achieved (plans),how they will be measured,and how they will be evaluated.
C.Rewards.Members of an organization will require rewards in the form of promotions,bonuses,praise,and so on.The entrepreneur or other key managers will need to be responsible for these rewards.
D.Selection criteria.The entrepreneur will need to determine a set of guidelines for selecting individuals for each position.
E.Training.Training,on or off the job,must be specified.This training may be in the form of formal education or learning skills.

Accepted Answer

The design of the organization will be t

Question 11

The only source of capital for a corporation is the sale of shares of stock.

Accepted Answer

A) True 
 B)False

Question 12

Which for form of organization has time limits on writing off capital losses?

Accepted Answer

A) partnership 
B) corporation 
C) sole proprietorship 
D) LLP 
A) partnership 
B) corporation 
C) sole proprietorship 
D) LLP

Question 13

The difference between a board of directors and a board of advisors is that:

Accepted Answer

A) the board of advisors meets less frequently. 
B) the board of directors lacks voting authority. 
C) the board of directors is subject to less pressure of litigation. 
D) the board of advisors are compensateD. 
A) the board of advisors meets less frequently. 
B) the board of directors lacks voting authority. 
C) the board of directors is subject to less pressure of litigation. 
D) the board of advisors are compensateD.

Question 14

The corporation can be created only by statute.

Accepted Answer

A) True 
 B)False

Question 15

In a ________ capital losses can be carried forward indefinitely.

Accepted Answer

A) sole proprietorship 
B) partnership 
C) corporation 
D) LLP 
A) sole proprietorship 
B) partnership 
C) corporation 
D) LLP

Question 16

A _____ can raise capital through bonds,stock and debt.

Accepted Answer

A) sole proprietorship 
B) partnership 
C) corporation 
D) LLP 
A) sole proprietorship 
B) partnership 
C) corporation 
D) LLP

Question 17

The board of directors:

Accepted Answer

A) lacks voting authority. 
B) has responsibilities to represent all shareholders. 
C) is less objective than the entrepreneur. 
D) are always volunteers and need not be compensateD. 
A) lacks voting authority. 
B) has responsibilities to represent all shareholders. 
C) is less objective than the entrepreneur. 
D) are always volunteers and need not be compensateD.

Question 18

In a limited partnership,the limited partners:

Accepted Answer

A) are liable only for the amount of their capital contributions. 
B) share the amount of personal liabilities equally. 
C) have only insurance as protection against liability suits. 
D) are allowed to decide on the amount of individual liabilities. 
A) are liable only for the amount of their capital contributions. 
B) share the amount of personal liabilities equally. 
C) have only insurance as protection against liability suits. 
D) are allowed to decide on the amount of individual liabilities.

Question 19

The legal form of business with the most alternatives for raising capital is the:

Accepted Answer

A) proprietorship. 
B) corporation. 
C) limited partnership. 
D) full partnership. 
A) proprietorship. 
B) corporation. 
C) limited partnership. 
D) full partnership.

Question 20

In designing the organization:

Accepted Answer

A) the initial design is usually complicated. 
B) poor design is a significant cause for business failure since the entrepreneur often performs all organization functions themselves. 
C) the entrepreneur easily transitions from a growing start-up to a growing,well managed business. 
D) as the workload increases the organizational structure will contract. 
A) the initial design is usually complicated. 
B) poor design is a significant cause for business failure since the entrepreneur often performs all organization functions themselves. 
C) the entrepreneur easily transitions from a growing start-up to a growing,well managed business. 
D) as the workload increases the organizational structure will contract.

The management team of a new venture:

Identify the nine areas an entrepreneur should consider in choosing a legal form of organization.

Discuss the six main functions of a board of directors.

The corporation is considered a legal person that is taxable and absorbs liability.

In what form of business is it most difficult to change your taxable year?

In which form of organization would it be possible for individuals that don't have any ownership stake in the business to make decisions?

Since a corporation is recognized as a separate tax,it has the advantage of being able to take many deductions and expenses that are not available to the proprietorship or partnership.

The sole proprietorship form of ownership gives owners the most control of business operations.

When hiring employees for the venture,the entrepreneur should consider the candidate's skills and abilities and avoid considering the individual's personality.

The only source of capital for a corporation is the sale of shares of stock.

Which for form of organization has time limits on writing off capital losses?

The difference between a board of directors and a board of advisors is that:

The corporation can be created only by statute.

In a ________ capital losses can be carried forward indefinitely.

A _____ can raise capital through bonds,stock and debt.

The board of directors:

In a limited partnership,the limited partners:

The legal form of business with the most alternatives for raising capital is the:

In designing the organization:

Entrepreneurship and the Entrepreneurial Mind-Set

Entrepreneurial Intentions and Corporate Entrepreneurship

Entrepreneurial Strategy: Generating and Exploiting New Entries

Creativity and the Business Idea

Identifying and Analyzing Domestic and International Opportunities

Intellectual Property and Other Legal Issues for the Entrepreneur

The Business Plan: Creating and Starting the Venture

The Marketing Plan

The Financial Plan

Sources of Capital

Informal Risk Capital, Venture Capital, and Going Public

Strategies for Growth and Managing the Implication of Growth

Accessing Resources for Growth From External Sources

Succession Planning and Strategies for Harvesting and Ending the Venture

Filters

Exam 9: The Organizational Plan

The management team of a new venture:

Identify the nine areas an entrepreneur should consider in choosing a legal form of organization.

Discuss the six main functions of a board of directors.

The corporation is considered a legal person that is taxable and absorbs liability.

In what form of business is it most difficult to change your taxable year?

In which form of organization would it be possible for individuals that don't have any ownership stake in the business to make decisions?

Since a corporation is recognized as a separate tax,it has the advantage of being able to take many deductions and expenses that are not available to the proprietorship or partnership.

The sole proprietorship form of ownership gives owners the most control of business operations.

When hiring employees for the venture,the entrepreneur should consider the candidate's skills and abilities and avoid considering the individual's personality.

The only source of capital for a corporation is the sale of shares of stock.

Which for form of organization has time limits on writing off capital losses?

The difference between a board of directors and a board of advisors is that:

The corporation can be created only by statute.

In a ________ capital losses can be carried forward indefinitely.

A _____ can raise capital through bonds,stock and debt.

The board of directors:

In a limited partnership,the limited partners:

The legal form of business with the most alternatives for raising capital is the:

In designing the organization:

Entrepreneurship and the Entrepreneurial Mind-Set

Entrepreneurial Intentions and Corporate Entrepreneurship

Entrepreneurial Strategy: Generating and Exploiting New Entries

Creativity and the Business Idea

Identifying and Analyzing Domestic and International Opportunities

Intellectual Property and Other Legal Issues for the Entrepreneur

The Business Plan: Creating and Starting the Venture

The Marketing Plan

The Financial Plan

Sources of Capital

Informal Risk Capital, Venture Capital, and Going Public

Strategies for Growth and Managing the Implication of Growth

Accessing Resources for Growth From External Sources

Succession Planning and Strategies for Harvesting and Ending the Venture

Filters