Chapter 8 Test "Types of Business Organizations"

Front

Sole proprietors have ____________, a situation in which a business owner is responsible for all the losses, debts, and other claims against the business.

Back

unlimited liability

Front

A __________ is a form of business organization recognized by law as a separate legal entity having all the rights of an individual. It has the right to buy and sell property, enter into legal contracts, and sue and be sued.

Back

corporation

Front

What is the name for an individual who owns a share of a corporation and is entitled to part of its profits?

Back

stockholder

Front

What do many people consider to be the chief advantage of sole proprietorship? Options: The owner does not have to obey labor laws. The owner has unlimited startup funds. The owner keeps all the profits. The owner has unlimited liability.

Back

The owner keeps all the profits.

Front

What does the term limited life mean?

Back

The business does not continue if the owner leaves.

Front

What is a business owned and managed by a single person called?

Back

sole proprietorship

Front

Disadvantages for this type of business include: owner pays for everything, hard to get money to start from the bank, owner might lack skills & unlimited liability. Options: Sole Proprietorship, Partnership, Corporation, Franchise

Back

Sole Proprietorship

Front

What is a major advantage of a business that is a partnership rather than a sole proprietorship?

Back

The responsibility for the business is shared.

Front

What is a business owned by stockholders/investors but operated by others?

Back

Corporation

Front

Which is ONE disadvantage of Sole Proprietorship? Less direct control, Disagreements, Hard to raise money, Unlimited Life

Back

Hard to raise money