Question 1

Compare and contrast the following forms of ownership: a corporation,an S corporation,and a limited liability company.

Accepted Answer

• All have limited liability.• The LLC and S corporation are both similar to a partnership in the way they see fit to divide income.They both avoid double taxation.• Both the C and S corporation have continuity of existence and transferability of ownership.• The LLC is not subject to the same restrictions as an S corporation.For example,an S corporation cannot have more than 75 shareholders,no shareholders may be foreigners or corporations,and it may have only one class of stock.This is not the case with the LLC.• Unlike the corporation,an LLC does not have perpetual life.

Question 2

Defining the duties,responsibilities,contributions,and roles of the partners in a partnership agreement is not necessary since the law covers these provisions automatically.

Accepted Answer

A) True 
 B)False  False

Question 3

Liquidating an S corporation involves several steps,including paying all taxes and debts,obtaining the written approval of shareholders to dissolve the company,filing a statement of intent to dissolve with the secretary of state's office,and finally distributing all remaining assets of the corporation to shareholders.

Accepted Answer

A) True 
 B)False  True

Question 4

One significant advantage of a corporation is the ability to attract capital.

Accepted Answer

A) True 
 B)False

Question 5

Most states do not require a Certificate of Incorporation or a charter to be filed for a new corporation.

Accepted Answer

A) True 
 B)False

Question 6

A professional corporation is created in the same way as a regular corporation,and exists to provide the advantages of corporate ownership,including limited liability,to professionals such as doctors and lawyers.

Accepted Answer

A) True 
 B)False

Question 7

Stockholders in the corporation have the same kind of liability as do general partners in a partnership.

Accepted Answer

A) True 
 B)False

Question 8

The most common form of business ownership that is also the simplest to create 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 9

All of the following are advantages of a partnership EXCEPT:

Accepted Answer

A) partnerships are relatively easy and inexpensive to establish. 
B) partnerships avoid double taxation since the partnership itself is not subject to federal taxation. 
C) partnerships have the greatest ability to accumulate capital of all of the forms of ownership. 
D) partnerships offer the ability to combine the management and business skills of two or more people in a complementary and powerful fashion. 
A) partnerships are relatively easy and inexpensive to establish. 
B) partnerships avoid double taxation since the partnership itself is not subject to federal taxation. 
C) partnerships have the greatest ability to accumulate capital of all of the forms of ownership. 
D) partnerships offer the ability to combine the management and business skills of two or more people in a complementary and powerful fashion.

Question 10

The corporation has the advantage of transferable ownership,which easily enables the corporation to sell shares to others or to transfer stock through inheritance.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not an advantage of the corporate form of ownership?

Accepted Answer

A) Limited liability for the owners 
B) It is the easiest and least expensive form of ownership to create. 
C) Easy transfer of ownership 
D) Perpetual life 
A) Limited liability for the owners 
B) It is the easiest and least expensive form of ownership to create. 
C) Easy transfer of ownership 
D) Perpetual life

Question 12

Which of the following generally is not required by a Certificate of Incorporation?

Accepted Answer

A) The names and the addresses of the incorporators 
B) A statement of the corporation's purpose 
C) A statement of how stock proceeds will be used 
D) The corporation's bylaws 
A) The names and the addresses of the incorporators 
B) A statement of the corporation's purpose 
C) A statement of how stock proceeds will be used 
D) The corporation's bylaws

Question 13

What is a partnership? Explain the advantages and the disadvantages of a partnership.

Accepted Answer

A partnership is an association of two o

Question 14

What is a limited liability company? How is one formed? What benefits does an LLC offer?

Accepted Answer

A relatively new form of ownership that,

Question 15

What is a corporation? Explain the advantages and the disadvantages of a corporation.

Accepted Answer

A corporation is a separate legal entity

Question 16

A limited liability company must have at least two owners.

Accepted Answer

A) True 
 B)False

Question 17

A joint venture is different from a partnership in that the joint venture:

Accepted Answer

A) can be formed only by two individuals. 
B) is formed for a specific purpose. 
C) continues indefinitely. 
D) requires that profits be shared equally. 
A) can be formed only by two individuals. 
B) is formed for a specific purpose. 
C) continues indefinitely. 
D) requires that profits be shared equally.

Question 18

In the ________ form of ownership,the business itself pays income taxes.

Accepted Answer

A) proprietorship 
B) partnership 
C) corporation 
D) All of the above 
A) proprietorship 
B) partnership 
C) corporation 
D) All of the above

Question 19

Limited liability partnerships (LLP)are where all partners in a business are limited partners,which offers the advantage of limited liability for the debts of the partnership.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following would be most likely to benefit from choosing S corporation status?

Accepted Answer

A) Startup companies anticipating net losses 
B) Corporations where net profits before any compensation to shareholders is less than $100,000 per year 
C) Highly profitable firms with substantial dividends to pay out to shareholders 
D) A and C only 
A) Startup companies anticipating net losses 
B) Corporations where net profits before any compensation to shareholders is less than $100,000 per year 
C) Highly profitable firms with substantial dividends to pay out to shareholders 
D) A and C only

Compare and contrast the following forms of ownership: a corporation,an S corporation,and a limited liability company.

Defining the duties,responsibilities,contributions,and roles of the partners in a partnership agreement is not necessary since the law covers these provisions automatically.

One significant advantage of a corporation is the ability to attract capital.

Most states do not require a Certificate of Incorporation or a charter to be filed for a new corporation.

A professional corporation is created in the same way as a regular corporation,and exists to provide the advantages of corporate ownership,including limited liability,to professionals such as doctors and lawyers.

Stockholders in the corporation have the same kind of liability as do general partners in a partnership.

The most common form of business ownership that is also the simplest to create is the:

All of the following are advantages of a partnership EXCEPT:

The corporation has the advantage of transferable ownership,which easily enables the corporation to sell shares to others or to transfer stock through inheritance.

Which of the following is not an advantage of the corporate form of ownership?

Which of the following generally is not required by a Certificate of Incorporation?

What is a partnership? Explain the advantages and the disadvantages of a partnership.

What is a limited liability company? How is one formed? What benefits does an LLC offer?

What is a corporation? Explain the advantages and the disadvantages of a corporation.

A limited liability company must have at least two owners.

A joint venture is different from a partnership in that the joint venture:

In the ________ form of ownership,the business itself pays income taxes.

Limited liability partnerships (LLP)are where all partners in a business are limited partners,which offers the advantage of limited liability for the debts of the partnership.

Which of the following would be most likely to benefit from choosing S corporation status?

The Foundations of Entrepreneurship

Inside the Entrepreneurial Mind: From Ideas to Reality

Designing a Competitive Business Model and Building a Solid Strategic Plan

Conducting a Feasibility Analysis and Crafting a Winning Business Plan

Franchising and the Entrepreneur

Buying an Existing Business

Building a Powerful Marketing Plan

E-Commerce and the Entrepreneur

Pricing Strategies

Creating a Successful Financial Plan

Managing Cash Flow

Sources of Financing: Debt and Equity

Choosing the Right Location and Layout

Global Opportunities

Building a Team and Management Succession

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Exam 5: Forms of Business Ownership

Compare and contrast the following forms of ownership: a corporation,an S corporation,and a limited liability company.

Defining the duties,responsibilities,contributions,and roles of the partners in a partnership agreement is not necessary since the law covers these provisions automatically.

One significant advantage of a corporation is the ability to attract capital.

Most states do not require a Certificate of Incorporation or a charter to be filed for a new corporation.

A professional corporation is created in the same way as a regular corporation,and exists to provide the advantages of corporate ownership,including limited liability,to professionals such as doctors and lawyers.

Stockholders in the corporation have the same kind of liability as do general partners in a partnership.

The most common form of business ownership that is also the simplest to create is the:

All of the following are advantages of a partnership EXCEPT:

The corporation has the advantage of transferable ownership,which easily enables the corporation to sell shares to others or to transfer stock through inheritance.

Which of the following is not an advantage of the corporate form of ownership?

Which of the following generally is not required by a Certificate of Incorporation?

What is a partnership? Explain the advantages and the disadvantages of a partnership.

What is a limited liability company? How is one formed? What benefits does an LLC offer?

What is a corporation? Explain the advantages and the disadvantages of a corporation.

A limited liability company must have at least two owners.

A joint venture is different from a partnership in that the joint venture:

In the ________ form of ownership,the business itself pays income taxes.

Limited liability partnerships (LLP)are where all partners in a business are limited partners,which offers the advantage of limited liability for the debts of the partnership.

Which of the following would be most likely to benefit from choosing S corporation status?

The Foundations of Entrepreneurship

Inside the Entrepreneurial Mind: From Ideas to Reality

Designing a Competitive Business Model and Building a Solid Strategic Plan

Conducting a Feasibility Analysis and Crafting a Winning Business Plan

Franchising and the Entrepreneur

Buying an Existing Business

Building a Powerful Marketing Plan

E-Commerce and the Entrepreneur

Pricing Strategies

Creating a Successful Financial Plan

Managing Cash Flow

Sources of Financing: Debt and Equity

Choosing the Right Location and Layout

Global Opportunities

Building a Team and Management Succession

Filters