Deck 5: Forms of Business Ownership and Organization

Question 1

Many small businesses are home-based businesses.

Answer 1

True

Question 2

Innovation is a major small business advantage.

Answer 2

True

Question 3

Small businesses are more likely than large businesses to employ older workers, but NOT younger ones.

Answer 3

False

Question 4

More than half of all small businesses fail within the first year.

Question 5

Small businesses produce fewer patents per year than large businesses.

Question 6

Access to the Internet and availability of communications devices such as the BlackBerry and other smartphone technology makes it convenient to run a home-based business.

Question 7

Many small businesses operate from the owner's residence.

Question 8

About 98% of business in Canada employ fewer than 100 employees.

Question 9

Small businesses that provide services have experienced a greater increase in new jobs than those that produce goods.

Question 10

Many of today's most successful high-technology companies began as small businesses.

Question 11

In the past 15 years many small businesses have closed because larger firms have bought out the small independent businesses.

Question 12

Twenty-first century innovations developed by small businesses include social networking sites and green energy industries.

Question 13

Outsourcing from a large corporation has a negative effect on small businesses.

Question 14

Large corporations are more likely to hire employees with challenges than small businesses.

Question 15

In an attempt to assist small business to grow, there are government programs which provide incentives to companies that purchase goods and services from smaller suppliers.

Question 16

Small businesses often hire the youngest workers.

Question 17

Non-farming small businesses such as insurance agencies and retail shops contribute less than 10 percent of the nation's GDP.

Question 18

The vast majority of firms have fewer than 500 employees.

Question 19

Small business generate more than 30% of Canada's GDP.

Question 20

Small businesses generate over 50 percent of new jobs.

Question 21

Securing adequate financing is a major problem for most small businesses.

Question 22

A business plan should include résumés of the company's principal owners.

Question 23

Small businesses are NOT required to pay taxes for workers' compensation or CPP.

Question 24

The Canada Small Business Financing Program (CSBFP) is the major lending source for small businesses needing additional funds.

Question 25

Through the Canada Small Business Financing Program (CSBFP) the government guarantees payment for up to 100 percent of money loaned to a small business.

Question 26

Excessive government paperwork causes some small businesses to close down.

Question 27

Most business incubators are run by venture capital firms.

Question 28

Statistics show that most failures in small businesses happen because of poor management.

Question 29

Martha is a small business owner in Ontario and she should NOT worry about government regulations since the government support and provide incentives for small businesses to succeed.

Question 30

Taxes and government regulations are more significant issues for small businesses than for large businesses.

Question 31

One of the most important tasks for an entrepreneur is to create a business plan.

Question 32

Today, 80 percent of majority women-owned small and medium-sized enterprises operate in the manufacturing sector.

Question 33

Business incubators provide low-cost, shared business facilities to small startup companies in order to encourage business development.

Question 34

Financial forecasts are almost impossible to determine for new businesses, and therefore omitted from the initial business plan.

Question 35

Venture Capitalists will only invest in companies when the economy is strong.

Question 36

Of the small businesses which register each year, about 30% on average survive for five years.

Question 37

An advantage of starting a home-based business is the lower startup expenses.

Question 38

LinkedIn is a social networking site with an employment focus.

Question 39

Most small business owners realize that personal credit cards carry excessive interest rates, so they avoid using them to finance their business.

Question 40

Most small businesses turn a profit within the first year.

Question 41

One strategy for entering international market is by franchising.

Question 42

Owners of corporations may owe personal income taxes on dividends, which are paid from after-tax corporate profits. This is an example of double taxation.

Question 43

Franchising combines the freedom of business ownership with the support of a large company.

Question 44

Dissolving a partnership is easier than breaking up a sole proprietorship.

Question 45

Majority women-owned small and medium-sized enterprises produce annual commercial revenues of more than $72 billion.

Question 46

Strict franchise agreements help to maintain the integrity of the brand.

Question 47

Initial investment amounts and ongoing franchise fees tend to be a relatively small cost of owning and operating a franchise.

Question 48

Investing in a franchise guarantees profit to the franchisee.

Question 49

One of the main advantages of buying a franchise is name brand recognition.

Question 50

In a partnership, each partner is liable for the business-related debts of the other partners.

Question 51

One important advantage of franchising is its ability to provide business expertise for relatively inexperienced franchisees.

Question 52

Franchising overseas is too difficult for most companies.

Question 53

Nearshoring is the best way to enter international markets.

Question 54

A small business owner who sells the goods or services of the supplier is known as the franchisor.

Question 55

Corporations are the most common form of business ownership.

Question 56

Sole proprietorships are easy to form and dissolve.

Question 57

Class action lawsuits filed against drug manufacturers are filed against the corporations themselves, NOT the owners of these corporations.

Question 58

A sole proprietor faces unlimited liability.

Question 59

Large businesses must be organized as corporations.

Question 60

Franchisors typically experience a greater return on investment than if the firm were run entirely as a company-owned chain.

Question 61

A vertical merger occurs between firms at different levels in the distribution channel.

Question 62

A provincial corporation has the right to carry on business only in the province in which it is incorporated.

Question 63

The death of a shareholder does NOT result in the death of the corporation.

Question 64

Certain functions, such as municipal water supply, are considered to be so important to public welfare they are not entrusted to private ownership.

Question 65

More than 97 percent of all Canadian businesses employ

A) 100 or fewer employees.
B) 1,000 to 3,000 employees.
C) 3,000 to 5,000 employees.
D) more than 5,000 employees.

Question 66

Owners of common stock are the last to receive any dividends.

Question 67

A corporation's assets and liabilities are separate from those of its owners.

Question 68

A conglomerate merger is a merger of unrelated firms.

Question 69

A joint venture is a partnership between companies formed for a specific purpose. The companies share the investment, the risk, and the rewards.

Question 70

Tata Motors purchase of Jaguar is an example of a horizontal merger.

Question 71

The CEO of a corporation is automatically the chair of the board of directors.

Question 72

Not-for-profit corporations do NOT issue stock certificates and are exempt from paying income taxes.

Question 73

Small-business owners want to determine whether their companies meet the standards for small-business designation because

A) they do not have to pay taxes on their profits.
B) government agencies offer benefits designed to help and protect the interests of small businesses.
C) incorporation is easier for them.
D) banks are more likely to grant them loans.

Question 74

Horizontal mergers are formed to ensure adequate supplies of raw materials.

Question 75

Preferred shareholders typically have voting rights.

Question 76

Joint ventures are NOT ideal for international companies due to logistics and conflicting business laws.

Question 77

The Hewlett Packard purchase of Compaq is an example of a conglomerate merger.

Question 78

Commercial banks are considered to be financial cooperatives.

Question 79

Some cooperatives are created so that small producers can be more competitive in the marketplace.

Question 80

Shareholders are the de-facto owners of a corporation.