Deck 4: Types of Business Ownership

Question 1

Local residents have always thought the small store on the corner of Locust and Congress was a partnership between John and Joe, two brothers from the neighbourhood.But Joe is the real owner.This probably means that the store is a

A) limited partnership.
B) sole trader.
C) corporation.
D) cooperative.
E) joint venture.

Answer 1

B

Question 2

To close a sole tradership, the owner must

A) notify the secretary of state.
B) pay creditors.
C) publish an out-of-business statement in the newspaper.
D) have all licences and permits revoked.
E) do none of the above.

Answer 2

B

Question 3

In the UK, approximately 72 percent of all businesses are

A) corporations.
B) partnerships.
C) sole traders.
D) joint ventures.
E) franchises.

Answer 3

C

Question 4

B&G, Inc.
A year ago, Kevin went to work for B&G, Inc.He has worked for the finance department ever since he started.He noticed that the corporation was only taxed as though it were a partnership.This was something that he found very odd when he first started working for the company, but he later realised it was a fairly common practice.He recognised that this was one of the advantages of this type of corporation.
While the job was challenging, Kevin was not happy.He wanted to work for a company whose main goal was to provide service to the community, not to make a profit.However, Kevin felt that, considering his present financial situation, he had to continue working for B&G, Inc.A week later, Kevin discovered there was going to be a merger between B&G, Inc.and one of its major competitors.Kevin's boss informed him that he would be getting a promotion and a raise.While he was excited about making more money, he still was not happy.He knew then that he would not be working for the company for long.
Refer to B&G, Inc.Which of these features does not belong to this type of corporation?

A) No double taxation
B) Management flexibility
C) Limited liability
D) Personal asset protection
E) Many Internal Revenue tax regulations

Question 5

B&G, Inc.
A year ago, Kevin went to work for B&G, Inc.He has worked for the finance department ever since he started.He noticed that the corporation was only taxed as though it were a partnership.This was something that he found very odd when he first started working for the company, but he later realised it was a fairly common practice.He recognised that this was one of the advantages of this type of corporation.
While the job was challenging, Kevin was not happy.He wanted to work for a company whose main goal was to provide service to the community, not to make a profit.However, Kevin felt that, considering his present financial situation, he had to continue working for B&G, Inc.A week later, Kevin discovered there was going to be a merger between B&G, Inc.and one of its major competitors.Kevin's boss informed him that he would be getting a promotion and a raise.While he was excited about making more money, he still was not happy.He knew then that he would not be working for the company for long.
Refer to B&G, Inc.What type of organisation is B&G, Inc.?

A) Sole trader
B) Limited-liability company
C) S-corporation
D) Not-for-profit corporation
E) Cooperative

Question 6

When compared to partnerships and corporations, sole trader account for ____ percent of total sales.

A) 34
B) 16
C) 9
D) 4
E) 2

Question 7

B&G, Inc.
A year ago, Kevin went to work for B&G, Inc.He has worked for the finance department ever since he started.He noticed that the corporation was only taxed as though it were a partnership.This was something that he found very odd when he first started working for the company, but he later realised it was a fairly common practice.He recognised that this was one of the advantages of this type of corporation.
While the job was challenging, Kevin was not happy.He wanted to work for a company whose main goal was to provide service to the community, not to make a profit.However, Kevin felt that, considering his present financial situation, he had to continue working for B&G, Inc.A week later, Kevin discovered there was going to be a merger between B&G, Inc.and one of its major competitors.Kevin's boss informed him that he would be getting a promotion and a raise.While he was excited about making more money, he still was not happy.He knew then that he would not be working for the company for long.
Refer to B&G, Inc.What type of organisation was Kevin considering switching to?

A) Limited-liability corporation
B) Sole trader
C) S-corporation
D) Not-for-profit corporation
E) Closed corporation

Question 8

Karen Howard loves to cook and receives unqualified praise whenever she prepares a meal for someone.Encouraged by these compliments and eager to put her culinary talents to good use, Karen decides to open a small neighbourhood restaurant.Since she plans to maintain complete control of the business, she will most likely organise it as a

A) limited partnership.
B) corporation.
C) general partnership.
D) cooperative.
E) sole trader.

Question 9

Samantha's Dilemma
Samantha graduated from college and needed to decide where she wanted to work.She had several options.Her aunt Julie owned and operated a small business that she started about twenty years ago.Julie, an individual owner of her business, informed Samantha that she could work for her.On one hand, Samantha thought it would be a great opportunity to be able to work for her aunt, learn the business, and then run the business when her aunt retired.On the other hand, she also felt that she wanted something a little more challenging; a job where she could really use her education.Her other option would be to work for a company that a friend and her husband had started and jointly owned.It was a rapidly growing company with plenty of opportunity for advancement.However, Samantha had some reservations about this choice because she was not sure she wanted to work for friends.Her last option was to work for a large retail company, headquartered in Maryland, which had stores across the UK.
After much consideration, Samantha decided she didn't want an opportunity and a job because someone knew her.She wanted to prove how motivated and hard-working she was.Once she weighed all the advantages and disadvantages of her different options, she decided to work for the large retail company so that she could gain the most experience for herself.
Refer to Samantha's Dilemma.What would not be an advantage of Samantha's aunt's business?

A) Pride of ownership
B) Retention of profits
C) No special taxes
D) Ability to be your own boss
E) Unlimited liability

Question 10

Glenn owns and operates a large hardware store in Missouri that employs about fifty people.He delegates some of the decision making to two managers, but he remains the only owner.Glenn's business is organised as a

A) corporation.
B) partnership.
C) sole trader.
D) limited partnership.
E) limited-liability corporation.

Question 11

Thomas wants to make money, so he starts his own business as a sole proprietor.He likes this form of business because

A) he will get to keep all of the profits the business makes.
B) profit is guaranteed since he will be the only owner.
C) it will provide a steady income for him.
D) he has to split the profits with only one other person.
E) he has to pay small dividends to the other owners.

Question 12

Angela is tired of her boss as well as corporate UK in general.She decides she would like to start a business where no one tells her what to do, and she can always make the decisions.The best form of business for Angela is a(n)

A) partnership.
B) limited partnership.
C) singleship.
D) sole trader.
E) S-corporation.

Question 13

Samantha's Dilemma
Samantha graduated from college and needed to decide where she wanted to work.She had several options.Her aunt Julie owned and operated a small business that she started about twenty years ago.Julie, an individual owner of her business, informed Samantha that she could work for her.On one hand, Samantha thought it would be a great opportunity to be able to work for her aunt, learn the business, and then run the business when her aunt retired.On the other hand, she also felt that she wanted something a little more challenging; a job where she could really use her education.Her other option would be to work for a company that a friend and her husband had started and jointly owned.It was a rapidly growing company with plenty of opportunity for advancement.However, Samantha had some reservations about this choice because she was not sure she wanted to work for friends.Her last option was to work for a large retail company, headquartered in Maryland, which had stores across the UK.
After much consideration, Samantha decided she didn't want an opportunity and a job because someone knew her.She wanted to prove how motivated and hard-working she was.Once she weighed all the advantages and disadvantages of her different options, she decided to work for the large retail company so that she could gain the most experience for herself.
Refer to Samantha's Dilemma.If Samantha worked for the large retail company in Philadelphia, what type of corporation would that be?

A) Foreign
B) Alien
C) International
D) Domestic
E) Global

Question 14

Which form of business is the easiest to start?

A) Corporation
B) Partnership
C) Entrepreneurship
D) Sole trader
E) S-corporation

Question 15

Laura wants to start a business, but she is unsure of the legal form best for her.Short of cash, she has decided to take the form that is the least expensive and most flexible in terms of decision making and implementation.Which would you recommend?

A) Joint venture
B) Partnership
C) Sole trading
D) Cooperative
E) Corporation

Question 16

The simplest form of business owned and operated by one person is called a(n)

A) franchise.
B) partnership.
C) S-corporation.
D) sole trader.
E) syndicate.

Question 17

Samantha's Dilemma
Samantha graduated from college and needed to decide where she wanted to work.She had several options.Her aunt Julie owned and operated a small business that she started about twenty years ago.Julie, an individual owner of her business, informed Samantha that she could work for her.On one hand, Samantha thought it would be a great opportunity to be able to work for her aunt, learn the business, and then run the business when her aunt retired.On the other hand, she also felt that she wanted something a little more challenging; a job where she could really use her education.Her other option would be to work for a company that a friend and her husband had started and jointly owned.It was a rapidly growing company with plenty of opportunity for advancement.However, Samantha had some reservations about this choice because she was not sure she wanted to work for friends.Her last option was to work for a large retail company, headquartered in Maryland, which had stores across the UK.
After much consideration, Samantha decided she didn't want an opportunity and a job because someone knew her.She wanted to prove how motivated and hard-working she was.Once she weighed all the advantages and disadvantages of her different options, she decided to work for the large retail company so that she could gain the most experience for herself.
Refer to Samantha's Dilemma.Based on the information provided, what type of business does Samantha's aunt operate?

A) Incorporation
B) Partnership
C) Franchise
D) Corporation
E) Sole trader

Question 18

Samantha's Dilemma
Samantha graduated from college and needed to decide where she wanted to work.She had several options.Her aunt Julie owned and operated a small business that she started about twenty years ago.Julie, an individual owner of her business, informed Samantha that she could work for her.On one hand, Samantha thought it would be a great opportunity to be able to work for her aunt, learn the business, and then run the business when her aunt retired.On the other hand, she also felt that she wanted something a little more challenging; a job where she could really use her education.Her other option would be to work for a company that a friend and her husband had started and jointly owned.It was a rapidly growing company with plenty of opportunity for advancement.However, Samantha had some reservations about this choice because she was not sure she wanted to work for friends.Her last option was to work for a large retail company, headquartered in Maryland, which had stores across the UK.
After much consideration, Samantha decided she didn't want an opportunity and a job because someone knew her.She wanted to prove how motivated and hard-working she was.Once she weighed all the advantages and disadvantages of her different options, she decided to work for the large retail company so that she could gain the most experience for herself.
Refer to Samantha's Dilemma.What type of company does Samantha's friend operate?

A) Incorporation
B) Partnership
C) Franchise
D) Corporation
E) Sole trader

Question 19

B&G, Inc.
A year ago, Kevin went to work for B&G, Inc.He has worked for the finance department ever since he started.He noticed that the corporation was only taxed as though it were a partnership.This was something that he found very odd when he first started working for the company, but he later realised it was a fairly common practice.He recognised that this was one of the advantages of this type of corporation.
While the job was challenging, Kevin was not happy.He wanted to work for a company whose main goal was to provide service to the community, not to make a profit.However, Kevin felt that, considering his present financial situation, he had to continue working for B&G, Inc.A week later, Kevin discovered there was going to be a merger between B&G, Inc.and one of its major competitors.Kevin's boss informed him that he would be getting a promotion and a raise.While he was excited about making more money, he still was not happy.He knew then that he would not be working for the company for long.
Refer to B&G, Inc.B&G, Inc.was going through a ____ merger.

A) Vertical
B) Horizontal
C) conglomerate
D) Hostile
E) Leveraged

Question 20

Which of the following is necessary for starting a sole tradership?

A) A contract
B) An agreement
C) An application to the secretary of state
D) Articles of sole trading
E) No specific legal documents

Question 21

A business partnership that is owned and managed like a corporation but taxed like a partnership is called a(n)

A) limited partnership.
B) master limited partnership.
C) domestic partnership.
D) alien partnership.
E) limited-liability company.

Question 22

A ____ invests money in the business but has no management responsibility.

A) general partner
B) limited partner
C) sole trader
D) nominal partner
E) Stockbroker

Question 23

Ted's partnership agreement with two other men was a bit unsound.One of the problems the men were encountering was uneven productivity among the partners.The agreement required each partner to contribute to every aspect of the business to receive an equal portion of the profits.This agreement did not reflect the idea that

A) all partners need not be equal; that is, there are different types of partners.Some may be fully active in running the business, whereas others may have a more limited role.
B) limited partners are required to be active in day-to-day business operations.
C) customers and creditors of a limited partnership need not be protected.
D) the Uniform Partnership Act requires every general partnership to have at least one limited partner.
E) each partner must agree to contracts entered into on behalf of all the others.

Question 24

The major reason why businesses change from sole traderships to other forms of ownership is to

A) gain unlimited liability.
B) avoid unlimited liability.
C) avoid lack of continuity.
D) obtain help and eliminate the problem of too much to do in one day.
E) offer advancement opportunities for employees.

Question 25

Which of the following is not a disadvantage of sole traders?

A) Unlimited liability
B) Lack of money
C) Double taxation
D) Lack of continuity
E) Limited management skills

Question 26

According to the text, which of the following statements is false?

A) The sole trader is often the sole manager.
B) Many sole traders cannot afford to hire the help they need.
C) Potential employees often feel there is no room for advancement in a sole trader.
D) When compared to larger businesses, the lure of employee benefits is one reason why people go to work for sole traders.
E) The sole trader often finds it hard to keep competent employees.

Question 27

Stephen decides his business will begin staying open until 7 p.m.instead of 6 p.m.The next day, the shop stays open until 7 p.m.This environment of flexibility to quickly change is characteristic of what form of business organisation?

A) Corporation
B) Partnership
C) S-corporation
D) Flexible partnership
E) Sole trader

Question 28

Most partnerships have ____ partners.

A) Two
B) Three
C) Four
D) Five
E) more than five

Question 29

Mike Nettles approached Nathan Lang about becoming a partner in a firm that destroys environmental waste.While Mike would like to become a partner in the firm, he is concerned about his liability because he has recently inherited a lot of money.In this situation, Mike should become a

A) general partner with a majority ownership interest in the business.
B) general partner with a minority ownership interest in the business.
C) limited partner.
D) joint venturist.
E) sole trader.

Question 30

Legally, a partnership must

A) have at least one limited partner.
B) have at least one general partner.
C) make all owners general partners.
D) not have any general partners.
E) designate a limited partner to be responsible for all debts of the partnership.

Question 31

How might a sole trader have a possible tax advantage?

A) It does not have to make tax payments until the end of the year.
B) It does not have to pay federal income taxes.
C) It does not have to charge sales tax on its merchandise.
D) It does not pay special state and federal taxes that corporations pay.
E) It is subject to a form of double taxation.

Question 32

Unlimited liability means

A) there is no limit on the amount an owner can borrow.
B) creditors will absorb any loss from nonpayment of debt.
C) the business can borrow money for any type of purchase.
D) the owner is responsible for all business debts.
E) stockholders can borrow money from the business.

Question 33

The partner who can lose only what he or she has invested in a business is the

A) general partner.
B) sole trader.
C) manager.
D) employee.
E) limited partner.

Question 34

The person who assumes full co-ownership of a partnership, including unlimited liability, is a

A) sole trader.
B) stockholder.
C) shareholder.
D) limited partner.
E) general partner.

Question 35

Which of the following is not an advantage of a sole trader?

A) It is easy to form and dissolve.
B) It has unlimited liability.
C) Profits are taxed as personal income.
D) There owner has the flexibility of being his or her own boss.
E) The owner keeps all profits.

Question 36

A voluntary association of two or more people acting as co-owners of a business is known as a

A) partnership.
B) corporation.
C) sole traders.
D) conglomerate.
E) syndicate.

Question 37

After Flora has gotten all the money she can from the bank and still cannot keep up with her fast-growing business, what is she most likely to do next if she wants her company to continue growing?

A) Obtain a partner or form a corporation to attract more money.
B) Hire more employees.
C) Turn away potential new customers.
D) Continue to plead with the bank for more money.
E) Hold a fundraising campaign.

Question 38

When the owner of a sole trader dies, what becomes of the business?

A) The employees take over the business.
B) It ceases to exist unless the heirs take it over or sell it.
C) It is automatically auctioned to the highest bidder.
D) It ceases to exist, and no one may legally take it over.
E) It may continue existing but only under a new name.

Question 39

Which of the following is an advantage of a sole trader?

A) The owner has unlimited liability.
B) The business ceases to exist when the owner dies.
C) There is a limit to the amount one person can borrow.
D) Profits are taxed as individual income.
E) The owner enjoys lack of continuity.

Question 40

Darrell inherited a large amount of money from his uncle.Darrell wishes to start his own business, and his lawyers encourage him to make it a corporation.What disadvantage of a sole trader are the lawyers trying to avoid?

A) Unlimited liability
B) Lack of management skills
C) Retention of all profits
D) Lack of money
E) Double taxation

Question 41

The ____ is a legal document that lists and explains the terms of the partnership.

A) co-owners' agreement
B) charter
C) Will
D) articles of partnership
E) formation contract

Question 42

Kayla purchases shares of ownership in General Electric.These shares are referred to as

A) ownership documents.
B) stock.
C) articles of ownership.
D) incorporation.
E) corporate certificates.

Question 43

Jack has been saving his excess funds for several years and has contemplated entering a partnership with a friend from college.Jack hesitates because he knows that it is ____ to invest money in a partnership and ____ to get the money back out.

A) difficult; difficult
B) easy; difficult
C) easy; impossible
D) easy; easy
E) difficult; easy

Question 44

Which of the following would least likely be stated in the articles of partnership?

A) Who will make the final decisions
B) How much each partner will invest
C) What the duties of each partner are
D) What products the company will sell
E) What will happen if a partner dies or wants to dissolve the partnership

Question 45

All of the following are disadvantages that Sean should consider before entering a partnership agreement with his cousin except

A) lack of continuity.
B) effects of disagreements with his cousin.
C) the inability to get out the money he invests.
D) unlimited liability.
E) double taxation.

Question 46

Kerry wants to start a business to sell handmade jewelry.She is very competent at making the jewelry and teaching others to make it, and she has saved a reasonable amount of money to start the business.Who of the following would make the best partner for Kerry?

A) Bailey, an artist with a real flair for new-aged jewelry design
B) Ashley, Kerry's best friend who is fun to hang out with and good at solving problems
C) Natalie, who has business experience with accounting, management, and marketing
D) Janette, who used to work at the jewelry counter at a department store
E) Darla, an engineer with industrial management experience but no money

Question 47

Quarrels among business associates have become common.The associates quarrel over what products the firm should sell, division of authority, selection of personnel, whether to bring family members into the business, whether to expand, and who is contributing most to the firm's success.Such feuding, which damages business relationships, occurs most frequently in what form of business?

A) Partnerships
B) Cooperatives
C) Corporations
D) Sole trading
E) S-corporations

Question 48

With respect to combined business skills and knowledge, which of the following partnerships is best?

A) Joe, Louis, and Raul own a bakery.They are able bakers by trade.Each wants to spend all of his time baking items.
B) Carolyn, Melvin, and Cindy own a boutique.Carolyn has marketing expertise.Melvin has ten years' experience operating a successful small store, including hiring employees, handling inventory control, buying, and managing credit.Cindy is a CPA.Each has agreed to use his or her experience and expertise for the success of the business.
C) Mary and Robert, both young pharmacists, own a pharmacy.Neither has taken a business course, but they are willing to learn.
D) Carter and Renée own a video store.Renée is most experienced as a homemaker and mother.Carter has worked as an auto mechanic for ten years.
E) Vince and Linda own a vacuum cleaner store.Vince knows everything possible about store operations.Linda is wealthy and can provide investment capital.

Question 49

All of the following are advantages of the partnership form of organisation except

A) unlimited liability.
B) retention of profits.
C) combined skills and knowledge.
D) better access to capital and credit.
E) ease of start-up.

Question 50

The form of business organisation that accounts for just over 80 percent of western sales revenues is the

A) sole trader
B) partnership.
C) corporation.
D) joint venture.
E) syndicate.

Question 51

Daniel, Thomas, and Lucas are partners in a law firm under a typical partnership agreement in which each owns an equal share of the business.Thomas dies suddenly of a heart attack.What will most likely become of the partnership?

A) It will immediately cease to exist and Daniel and Lucas will have to find new jobs.
B) Thomas's share of the business will automatically be split between Daniel and Lucas.
C) Daniel and Lucas will be able to purchase Thomas's interest from his estate.
D) Daniel and Lucas will have to quickly find a new partner to take Thomas's place.
E) It will dissolve, and Daniel and Lucas will lose personal property to pay business debts.

Question 52

Brian wants to start a business that provides canoe and kayak trips.He decides that it would be better to ask his brother Brad to become his partner because

A) one person could not possibly run this type of business.
B) Brian will receive all of the profits from the partnership.
C) together they will be able to get more capital and credit to start the business.
D) the business will pay less taxes than it would as a sole trader.
E) there are generally fewer control issues in a partnership than in a sole trader.

Question 53

Most master limited partnerships are in the areas of

A) natural energy and health care.
B) health care, the energy sector, and real estate.
C) health care, services, and food prep.
D) natural resources, energy, and real estate.
E) medical and dental care, natural resources, and health support services.

Question 54

What is the primary disadvantage of both a sole trader and a partnership that a corporation overcomes?

A) No access to capital
B) Taxing complications
C) Unlimited liability
D) Ease of start-up
E) Lack of secrecy

Question 55

Lisa and John own a partnership that provides rental equipment for parties and special occasions.Which of the following is true about the way Lisa and John would handle company profits?

A) Automatically split the profits, with 50 percent for Lisa and 50 percent for John.
B) They would do nothing because partnerships require that profits remain in the business.
C) Divide the profits according to each person's investment in the business.
D) Distribute the profits according to the terms of the partnership agreement.
E) Split the profits according to how many hours each person worked.

Question 56

Wade Comer and Tom Busby decide to start a partnership and offer accounting services.Which of the following is the best way to start this partnership?

A) They should orally discuss how they want the partnership to work and who is responsible for certain areas.
B) They should determine the exact way the business should be run and have a witness listen to their oral discussion.
C) They should let a third party, such as a consultant or an attorney, draft whatever agreement the consultant or attorney thinks is appropriate.
D) They should carefully draft an articles of partnership together, outlining each partner's responsibilities and other important information.
E) With the help of an attorney, they should draft a partnership agreement that states each partner's duties and investments.

Question 57

Keisha Cook and Donnie Blackman decide to go into business together.They start by writing an agreement listing and explaining the terms of the business they will both own, along with each of their responsibilities.Keisha and Donnie created a(n)

A) articles of partnership.
B) master limited partnership agreement.
C) licensing agreement.
D) corporate charter.
E) division of partnership agreement.

Question 58

With regard to taxation of partnerships, which of the following statements is true?

A) Profits are taxed twice.
B) Each partner is taxed in the same way as a sole trader.
C) Taxes are paid on a partnership's profits, after which each partner pays taxes on his or her share of the profits.
D) A partnership is exempt from taxes.
E) The partnership is taxed as a separate entity.

Question 59

The form of business organisation that comprises about 19 percent of western businesses is the

A) joint venture.
B) syndicate.
C) sole trader.
D) partnership.
E) corporation.

Question 60

As a limited partner in a construction business, Joe

A) has input only on major company decisions.
B) contributes only his time and not his money.
C) does not receive any portion of the profits.
D) only risks his initial investment.
E) cannot lose his investment in the partnership.

Question 61

Which of the following states offers the lowest organisational costs for corporations?

A) Delaware
B) Georgia
C) Michigan
D) New York
E) Alaska

Question 62

When starting a corporation, people submit articles of incorporation to

A) a county judge.
B) a secretary of state.
C) the U.S.Attorney General.
D) the Department of Commerce.
E) the Small Business Administration.

Question 63

Ordinary share carries all the following rights except the right to

A) vote on changes to the corporate charter.
B) share in profits.
C) receive information about the corporation.
D) receive part of the profit before other classes of stock.
E) attend the annual stockholders' meeting.

Question 64

In the state in which it is incorporated, a business is known as a(n)

A) S-corporation.
B) resident corporation.
C) public corporation.
D) foreign corporation.
E) domestic corporation.

Question 65

In all states besides the one in which it is incorporated, a business is known as a(n)

A) S-corporation.
B) resident corporation.
C) public corporation.
D) foreign corporation.
E) domestic corporation.

Question 66

Amy owns 100 shares of General Electric preferred stock.She wants to attend the annual stockholder meeting to cast her vote on company issues.Based on your knowledge from school, you caution Amy that

A) people with fewer than 1,000 shares of stock cannot vote.
B) stockholders are not allowed to attend the annual meetings.
C) most preferred stock does not have voting rights.
D) only institutional investors are allowed to attend the meetings.
E) she can vote only by proxy and not in person.

Question 67

What is the significance of the name preferred stock?

A) It is the type of stock that most investors would rather have.
B) Its claims on dividends are paid before those of ordinary share.
C) The overall return on preferred stock is higher than that on ordinary share.
D) This stock is available only to select individuals associated with the company.
E) This stock provides the most powerful voting rights.

Question 68

Mars, Inc., maker of M&Ms and other candy, is 100 percent owned by the Mars family and is therefore referred to as a(n)

A) open corporation.
B) public corporation.
C) syndicate.
D) cooperative.
E) closed corporation.

Question 69

A contract between a business and a state recognising the business as an artificial person is known as the

A) articles of partnership.
B) articles of incorporation.
C) S-corporation.
D) stock certificate.
E) proxy.

Question 70

Walmart is incorporated in Arkansas, the state of its origins and headquarters.Within Arkansas, Walmart is classified as a(n) ____ corporation.

A) privately-held
B) Foreign
C) Alien
D) domestic
E) hometown

Question 71

Anyone with the money can purchase shares of Coca-Cola's stock.This makes Coca-Cola a(n) ____ corporation.

A) Closed
B) Open
C) Domestic
D) Foreign
E) Alien

Question 72

Nortons, Inc.is a hardware store that is owned by members of the Norton family as well as a few close friends of the family.This company is a(n)

A) sole trader.
B) partnership.
C) open corporation.
D) closed corporation.
E) public corporation.

Question 73

Mercedes-Benz, which is chartered as a corporation in Germany but conducts much of its business in the United States, is known as a(n) ____ in the United States.

A) foreign corporation
B) alien corporation
C) domestic corporation
D) S-corporation
E) private corporation

Question 74

A distribution of earnings to the stockholders of a corporation is a(n)

A) par distribution.
B) dividend.
C) earnings per share.
D) distributed payment.
E) common payment.

Question 75

A ____ is a form that enables stockholders to allow someone else to vote for them.

A) Waiver
B) rights transfer
C) Proxy
D) voter registration
E) Dividend

Question 76

A corporation whose stock can be purchased by anyone and is traded in stock markets is known as a(n)

A) sole trader.
B) S-corporation.
C) closed corporation.
D) open corporation.
E) not-for-profit corporation.

Question 77

Susan has a commercial laundry service that has been growing rapidly.She wants to continue to grow the business, but she needs access to more money and does not want to risk her personal assets.Susan contacts her lawyer to see if all the legal requirements are met to start the process of

A) partnering.
B) selling her business.
C) incorporating.
D) consulting.
E) corporate opening.

Question 78

When incorporating, a business

A) may incorporate in any state it chooses.
B) must incorporate in the state in which its headquarters are located.
C) must incorporate in the state in which it does the most business.
D) must receive the secretary of state's permission to incorporate in any state other than the one in which its corporate headquarters will be located.
E) must do none of the above.

Question 79

Boeing is incorporated in Seattle, Washington.It has a large facility in Huntsville, Alabama, and is considered a(n) ____ because it conducts business within Alabama.

A) Outsider
B) domestic corporation
C) foreign corporation
D) tax write-off
E) alien corporation

Question 80

Sears Holding Corporation is incorporated in Delaware, but when it operates in Illinois and Texas, it is considered a(n) ____ corporation in those states.

A) domestic
B) foreign
C) alien
D) small
E) midsized