Question 1

Compare the three common types of mergers.

Accepted Answer

The answer of Compare the three common types of mergers....

Question 2

A group of friends is planning to start a business.Should they form a formal contract to establish themselves as a partnership? Elucidate the legal and practical aspects of this issue.

Accepted Answer

The answer of A group of friends is planning to...

Question 3

RSS Bank is registered as a corporation in Maryland.Apart from its financial objectives,the company has also formed a legal requirement to work for the welfare of the elderly citizens in the state.The bank is obligated to work for the cause even if there is a change in ownership.Based on this information,it can be concluded that RSS bank is a(n)________.

Accepted Answer

A)  public corporation 
B)  benefit corporation 
C)  unlimited company 
D)  S corporation 
E)  not-for-profit company

Question 4

Which of the following is a key difference between private corporations and public corporations?

Accepted Answer

A)  Private corporations are legally a group of people, whereas public corporations are distinct from any individual persons. 
B)  Private corporations cannot own property, whereas public corporations can own property. 
C)  Public corporations cannot own property, whereas private corporations can own property. 
D)  Private corporations do not have the power to run business of its own, whereas public corporations can run a business of its own. 
E)  Private corporations are owned by a few people, whereas public corporations can be owned by anyone who has the means to buy stake.

Question 5

A ________ is a partnership in which each partner has unrestricted accountability only for his or her own actions and at least some degree of responsibility for the partnership as a whole.

Accepted Answer

A)  master limited partnership 
B)  general partnership 
C)  sole proprietorship 
D)  combined proprietorship 
E)  limited liability partnership

Question 6

The number of shareholders is limited to fifty in a limited liability company.

Accepted Answer

A) True 
 B)False

Question 7

Explain the major disadvantages of incorporating a business as a corporation.

Accepted Answer

The answer of Explain the major disadvantages of incorporating a...

Question 8

An S corporation has the federal taxation advantages of a partnership.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is an action that allows the companies to collaborate without formally combining?

Accepted Answer

A)  strategic alliance 
B)  joint venture 
C)  merger 
D)  acquisition 
E)  amalgamation

Question 10

Robert owns three restaurants in Atlanta.He pays taxes for the income from the restaurants as his personal income.Robert's business is an example of a ________.

Accepted Answer

A)  personal partnership 
B)  sole proprietorship 
C)  joint venture 
D)  small corporation 
E)  limited liability firm

Question 11

Partnerships are subject to double taxation of income.

Accepted Answer

A) True 
 B)False

Question 12

Compare and contrast a master limited partnership and a limited liability partnership.

Accepted Answer

The answer of Compare and contrast a master limited partnership...

Question 13

A(n)________ is allowed to raise money by selling units of ownership to the general public in the same way corporations sell shares of stock to the public.

Accepted Answer

A)  master limited partnership 
B)  general partnership 
C)  sole proprietorship 
D)  unlimited proprietorship 
E)  limited liability partnership

Question 14

Corporate officers of an organization are elected directly by the shareholders of a corporation.

Accepted Answer

A) True 
 B)False

Question 15

Edwin runs an antique retail shop that is registered as a sole proprietorship.The liability exposure of Edwin's business ________.

Accepted Answer

A)  is limited to the amount he has invested on fixed assets 
B)  refers to the amount invested on variable assets 
C)  is more if the size of transactions is limited 
D)  refers to the total fixed investments made by him 
E)  is unlimited for the business's personal obligations

Question 16

Which of the following is a document that authorizes another person to vote on behalf of a shareholder in a corporation?

Accepted Answer

A)  agency agreement 
B)  proxy 
C)  draft 
D)  affidavit 
E)  share certificate

Question 17

Partners are responsible for each other's action in a limited liability partnership.

Accepted Answer

A) True 
 B)False

Question 18

Integral Solutions is a firm that offers open-source,enterprise-software services to small and medium companies.The company had a public issue two years ago and the company has shown significant growth in the current financial year.A major rival is silently amassing the company's shares to acquire majority stake in the company.In order to prevent this,the company issues shares to current shareholders at prices below the market value.This tactic used by Integral Solutions to prevent a takeover is an example of a ________.

Accepted Answer

A)  poison pill defense 
B)  proxy fight 
C)  direct offer 
D)  tender offer 
E)  white knight tactic

Question 19

In a sole proprietorship,the owner ________.

Accepted Answer

A)  obtains limited liability protection on the business's actions 
B)  is taxed more than once for the income generated 
C)  and the business are legally inseparable 
D)  has lesser responsibility compared to other forms 
E)  does not have personal liability for the transactions of the business

Question 20

Which of the following is a key difference between a corporation and a sole proprietorship?

Accepted Answer

A)  Compared to establishing a proprietorship, establishing a corporation is easier. 
B)  Unlike a corporation, a proprietorship is subject to double taxation. 
C)  Regulatory requirements are less severe for corporations than sole proprietorships. 
D)  Unlike a sole proprietorship, a corporation is subject to limited liability. 
E)  Establishing a sole proprietorship has complex legal requirements unlike a corporation.

Exam 5: Forms of Ownership

Compare the three common types of mergers.

A group of friends is planning to start a business.Should they form a formal contract to establish themselves as a partnership? Elucidate the legal and practical aspects of this issue.

Which of the following is a key difference between private corporations and public corporations?

A ________ is a partnership in which each partner has unrestricted accountability only for his or her own actions and at least some degree of responsibility for the partnership as a whole.

The number of shareholders is limited to fifty in a limited liability company.

Explain the major disadvantages of incorporating a business as a corporation.

An S corporation has the federal taxation advantages of a partnership.

Which of the following is an action that allows the companies to collaborate without formally combining?

Robert owns three restaurants in Atlanta.He pays taxes for the income from the restaurants as his personal income.Robert's business is an example of a ________.

Partnerships are subject to double taxation of income.

Compare and contrast a master limited partnership and a limited liability partnership.

A(n) ________ is allowed to raise money by selling units of ownership to the general public in the same way corporations sell shares of stock to the public.

Corporate officers of an organization are elected directly by the shareholders of a corporation.

Edwin runs an antique retail shop that is registered as a sole proprietorship.The liability exposure of Edwin's business ________.

Which of the following is a document that authorizes another person to vote on behalf of a shareholder in a corporation?

Partners are responsible for each other's action in a limited liability partnership.

In a sole proprietorship,the owner ________.

Which of the following is a key difference between a corporation and a sole proprietorship?