Question 1

In a closely held corporation,one of the steps that should be taken to avoid legal difficulties is:

Accepted Answer

A) hold annual meetings to elect officers are directors. 
B) make sure that the stockholders make all the major decisions. 
C) mingle corporate assets and the personal assets. 
D) None of the above 
A) hold annual meetings to elect officers are directors. 
B) make sure that the stockholders make all the major decisions. 
C) mingle corporate assets and the personal assets. 
D) None of the above

Question 2

The complementary skills refers to:

Accepted Answer

A) the sole proprietorship skills. 
B) partner's skills that complement one another. 
C) complementary skills offered by the employees. 
D) None of the above 
A) the sole proprietorship skills. 
B) partner's skills that complement one another. 
C) complementary skills offered by the employees. 
D) None of the above

Question 3

All partnerships must have:

Accepted Answer

A) at least three limited partners. 
B) no dormant partners. 
C) at least one general partner. 
D) at least one silent or money partner. 
A) at least three limited partners. 
B) no dormant partners. 
C) at least one general partner. 
D) at least one silent or money partner.

Question 4

Like a sole proprietorship,a partnership suffers from the disadvantage of:

Accepted Answer

A) poor capital accumulation. 
B) unlimited liability for all owners. 
C) double taxation of profits. 
D) the complexity of regulations under which it must operate. 
A) poor capital accumulation. 
B) unlimited liability for all owners. 
C) double taxation of profits. 
D) the complexity of regulations under which it must operate.

Question 5

In a limited partnership,limited partners are treated as:

Accepted Answer

A) sole proprietors. 
B) investors. 
C) stakeholders. 
D) directors. 
A) sole proprietors. 
B) investors. 
C) stakeholders. 
D) directors.

Question 6

There are no restrictions on how partners distribute the company's profits as long as they are consistent with the partnership agreement and do not violate the rights of any partner.

Accepted Answer

A) True 
 B)False

Question 7

A limited liability company differs from an S-corporation in:

Accepted Answer

A) that it is not subject to the same amount of restrictions. 
B) its ability to attract and accumulate capital. 
C) that ownership is not transferable through the sale of stock. 
D) that it is limited to only one class of stock. 
A) that it is not subject to the same amount of restrictions. 
B) its ability to attract and accumulate capital. 
C) that ownership is not transferable through the sale of stock. 
D) that it is limited to only one class of stock.

Question 8

While the sole proprietorship is the easiest type of business to get into,it is the most heavily regulated.

Accepted Answer

A) True 
 B)False

Question 9

Failing to keep corporate and personal funds separate is most often a problem in closely held corporations

Accepted Answer

A) True 
 B)False

Question 10

Jeff is forming a company.If he chooses a(n)________ form of ownership,he can have no more than 75 stockholders and must have only one class of stock.

Accepted Answer

A) partnership 
B) corporation 
C) S-corporation 
D) master limited partnership 
A) partnership 
B) corporation 
C) S-corporation 
D) master limited partnership

Question 11

The Uniform Partnership Act outlines a number of general obligations that partners have such as the obligation to:

Accepted Answer

A) give other partners complete information about all business affairs. 
B) share in the management and operation of the business. 
C) be compensated for personal expenses incurred. 
D) have access to the business's books and records. 
A) give other partners complete information about all business affairs. 
B) share in the management and operation of the business. 
C) be compensated for personal expenses incurred. 
D) have access to the business's books and records.

Question 12

An S Corporation can have more than 75 shareholders.

Accepted Answer

A) True 
 B)False

Question 13

The primary reason entrepreneurs choose to incorporate is because of:

Accepted Answer

A) the corporation's ability to attract capital. 
B) the need to attract top quality management talent to grow the business. 
C) the lower tax rates inherent in the corporate form of ownership. 
D) the limited liability of stockholders. 
A) the corporation's ability to attract capital. 
B) the need to attract top quality management talent to grow the business. 
C) the lower tax rates inherent in the corporate form of ownership. 
D) the limited liability of stockholders.

Question 14

In a limited partnership,the limited partners are treated like ________ by the law.

Accepted Answer

A) investors 
B) general partners 
C) sole proprietors 
D) honorary partners 
A) investors 
B) general partners 
C) sole proprietors 
D) honorary partners

Question 15

If a limited partner spent more than 500 hours in the company,he/she will be treated as general partner and will lose their limited liability protection.

Accepted Answer

A) True 
 B)False

Question 16

A "limited liability company" is legally treated just like a limited partnership.

Accepted Answer

A) True 
 B)False

Question 17

Like a proprietorship or partnership,in which the death of a founder ends the business,the corporation doesn't live beyond the lives of those who gave it life.

Accepted Answer

A) True 
 B)False

Question 18

Which type of ownership is not subject to federal taxation?

Accepted Answer

A) Sole Proprietorship 
B) Corporations 
C) Partnership 
D) Limited Liability Corporation 
A) Sole Proprietorship 
B) Corporations 
C) Partnership 
D) Limited Liability Corporation

Question 19

Small companies with net profits of less than $100,000 per year before any compensation to shareholders are ideally suited for S-corporation status.

Accepted Answer

A) True 
 B)False

Question 20

S-corporation status usually benefits start-up companies anticipating losses,and highly profitable firms with substantial dividends to pay out to shareholders.

Accepted Answer

A) True 
 B)False

Exam 3: Choosing a Form of Ownership

In a closely held corporation,one of the steps that should be taken to avoid legal difficulties is:

The complementary skills refers to:

All partnerships must have:

Like a sole proprietorship,a partnership suffers from the disadvantage of:

In a limited partnership,limited partners are treated as:

There are no restrictions on how partners distribute the company's profits as long as they are consistent with the partnership agreement and do not violate the rights of any partner.

A limited liability company differs from an S-corporation in:

While the sole proprietorship is the easiest type of business to get into,it is the most heavily regulated.

Failing to keep corporate and personal funds separate is most often a problem in closely held corporations

Jeff is forming a company.If he chooses a(n)________ form of ownership,he can have no more than 75 stockholders and must have only one class of stock.

The Uniform Partnership Act outlines a number of general obligations that partners have such as the obligation to:

An S Corporation can have more than 75 shareholders.

The primary reason entrepreneurs choose to incorporate is because of:

In a limited partnership,the limited partners are treated like ________ by the law.

If a limited partner spent more than 500 hours in the company,he/she will be treated as general partner and will lose their limited liability protection.

A "limited liability company" is legally treated just like a limited partnership.

Like a proprietorship or partnership,in which the death of a founder ends the business,the corporation doesn't live beyond the lives of those who gave it life.

Which type of ownership is not subject to federal taxation?

Small companies with net profits of less than $100,000 per year before any compensation to shareholders are ideally suited for S-corporation status.

S-corporation status usually benefits start-up companies anticipating losses,and highly profitable firms with substantial dividends to pay out to shareholders.

Entrepreneurs: the Driving Force Behind Small Business

Strategic Management and the Entrepreneur

Franchising and the Entrepreneur

Buying an Existing Business

Conducting a Feasibility Analysis and Crafting a Winning Business Plan

Creating a Solid Financial Plan

Managing Cash Flow

Building a Guerrilla Marketing Plan

Creative Use of Advertising and Promotion

Pricing and Credit Strategies

Global Marketing Strategies

E-Commerce and Entrepreneurship

Sources of Equity Financing

Sources of Debt Financing

Location,layout,and Physical Facilities

Supply Chain Management

Managing Inventory

Staffing and Leading a Growing Company

Management Succession and Risk Management Strategies in the Family Business

Ethics and Social Responsibility: Doing the Right Thing

The Legal Environment: Business Law and Government Regulation

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