Question 1

If a partnership is formed without an agreement,the partnership is automatically subject to the:

Accepted Answer

A) Certification of Incorporation laws. 
B) Uniform Partnership Act. 
C) Limited Liability Company Act. 
D) Revised Uniform Limited Partnership Act. 
A) Certification of Incorporation laws. 
B) Uniform Partnership Act. 
C) Limited Liability Company Act. 
D) Revised Uniform Limited Partnership Act.

Question 2

One of the advantages of a sole proprietorship is that skills and capabilities are unlimited because you,as sole proprietor,are able to assume all of these responsibilities.

Accepted Answer

A) True 
 B)False

Question 3

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 and 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 and 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 4

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 5

The ________ is a document that states in writing all of the terms of operating a business among the partners.

Accepted Answer

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

Question 6

Unlike a limited partnership,which prohibits limited partners from participating in day-to-day management of the business,an LLC does not restrict its members' ability to become involved in managing the company.

Accepted Answer

A) True 
 B)False

Question 7

Juan is starting a software writing company.He is the owner and has only 3 employees.He wants a simple inexpensive form of ownership that leaves him in control and that he can quickly dissolve if he decides to change to another business.His best choice of form of ownership would be:

Accepted Answer

A) S-corporation. 
B) partnership. 
C) corporation. 
D) sole proprietorship. 
A) S-corporation. 
B) partnership. 
C) corporation. 
D) sole proprietorship.

Question 8

While there are many forms of ownership,the three major forms are: proprietorship,partnership,and S-corporation.

Accepted Answer

A) True 
 B)False

Question 9

The ________ is a separate legal entity apart from its owners and may engage in business,make contracts,sue and be sued,and pay taxes.

Accepted Answer

A) sole proprietorship 
B) corporation 
C) partnership 
D) joint venture 
A) sole proprietorship 
B) corporation 
C) partnership 
D) joint venture

Question 10

The most popular form of business ownership is the:

Accepted Answer

A) sole proprietorship. 
B) partnership. 
C) corporation. 
D) S-corporation. 
A) sole proprietorship. 
B) partnership. 
C) corporation. 
D) S-corporation.

Question 11

A partnership is:

Accepted Answer

A) taxed like a corporation. 
B) not subject to the double taxation of some other forms of business. 
C) taxed at the lowest rate for an individual. 
D) taxed under capital gains laws as all profits are considered to come from appreciated assets. 
A) taxed like a corporation. 
B) not subject to the double taxation of some other forms of business. 
C) taxed at the lowest rate for an individual. 
D) taxed under capital gains laws as all profits are considered to come from appreciated assets.

Question 12

It is relatively easy and inexpensive to convert existing businesses into LLCs.

Accepted Answer

A) True 
 B)False

Question 13

Closely held corporations have shares that are controlled by a relatively small number of people,often family members,relatives,or friends.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is true about the content of a standard partnership agreement?

Accepted Answer

A) It does not specify how profits and losses will be distributed. 
B) It includes the Certificate of Incorporation. 
C) It specifies how the partnership may be dissolved and assets divided. 
D) While it specifies the location of the business and its purpose,it does not name the partners or their legal addresses in order to maintain privacy for the partners. 
A) It does not specify how profits and losses will be distributed. 
B) It includes the Certificate of Incorporation. 
C) It specifies how the partnership may be dissolved and assets divided. 
D) While it specifies the location of the business and its purpose,it does not name the partners or their legal addresses in order to maintain privacy for the partners.

Question 15

Antonio is a limited partner and is neither active nor generally openly associated with the firm.He is the ________ partner.

Accepted Answer

A) limited 
B) secret 
C) honorary 
D) dormant 
A) limited 
B) secret 
C) honorary 
D) dormant

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Which form of ownership is the least costly to form?

Accepted Answer

A) Sole proprietorship 
B) Corporation 
C) Partnership 
D) Limited liability corporation 
A) Sole proprietorship 
B) Corporation 
C) Partnership 
D) Limited liability corporation

Question 18

A limited liability company is formed under:

Accepted Answer

A) a Certificate of Incorporation. 
B) a Partnership Agreement. 
C) Articles of Organization. 
D) the Revised Uniform Partnership Act. 
A) a Certificate of Incorporation. 
B) a Partnership Agreement. 
C) Articles of Organization. 
D) the Revised Uniform Partnership Act.

Question 19

The Supreme Court has defined a partnership as "an artificial being,invisible,intangible,and existing only in contemplation of the law."

Accepted Answer

A) True 
 B)False

Question 20

The sole proprietorship is the simplest and least expensive form of ownership to begin.

Accepted Answer

A) True 
 B)False

Exam 5: Choosing a Form of Ownership

If a partnership is formed without an agreement,the partnership is automatically subject to the:

One of the advantages of a sole proprietorship is that skills and capabilities are unlimited because you,as sole proprietor,are able to assume all of these responsibilities.

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

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

The ________ is a document that states in writing all of the terms of operating a business among the partners.

Unlike a limited partnership,which prohibits limited partners from participating in day-to-day management of the business,an LLC does not restrict its members' ability to become involved in managing the company.

Juan is starting a software writing company.He is the owner and has only 3 employees.He wants a simple inexpensive form of ownership that leaves him in control and that he can quickly dissolve if he decides to change to another business.His best choice of form of ownership would be:

While there are many forms of ownership,the three major forms are: proprietorship,partnership,and S-corporation.

The ________ is a separate legal entity apart from its owners and may engage in business,make contracts,sue and be sued,and pay taxes.

The most popular form of business ownership is the:

A partnership is:

It is relatively easy and inexpensive to convert existing businesses into LLCs.

Closely held corporations have shares that are controlled by a relatively small number of people,often family members,relatives,or friends.

Which of the following is true about the content of a standard partnership agreement?

Antonio is a limited partner and is neither active nor generally openly associated with the firm.He is the ________ partner.

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

Which form of ownership is the least costly to form?

A limited liability company is formed under:

The Supreme Court has defined a partnership as "an artificial being,invisible,intangible,and existing only in contemplation of the law."

The sole proprietorship is the simplest and least expensive form of ownership to begin.

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Franchising and the Entrepreneur

Buying an Existing Business

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Creative Use of Advertising and Promotion

Pricing and Credit Strategies

Global Marketing Strategies

E-Commerce and Entrepreneurship

Creating a Solid Financial Plan

Managing Cash Flow

Sources of Equity Financing

Sources of Debt Financing

Location,layout,and Physical Facilities

Supply Chain Management

Managing Inventory

Staffing and Leading a Growing Company

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The Legal Environment: Business Law and Government Regulation

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