Econ Ch 6

A business license is a document issued by a local government unit that allows business activities within a certain geographic area.

• True
• False

One of the negative things about proprietorships is that business owners have unlimited liability for what the business does

• True
• False

Like the sole proprietorship, the owners of a limited liability company pay taxes on the income they receive from the business after the company pays taxes on its profits.

• True
• False

One of the obstacles to forming a general partnership is that the general partnership agreement is complex with confusing restrictions that vary from state to state.

• True
• False

The most serious disadvantage of a general partnership is the unlimited liability of both general partners.  

• True
• False

A limited partner is entitled to a part of the profits but does not have management or daily responsibilities.  

• True
• False

One common characteristic of limited liability partnerships is that they provide a “full shield” of protection from claims against the company.

• True
• False

A corporation can be sued, own property, and borrow money.  

• True
• False

All corporations are regulated by the Securities and Exchange Commission (SEC).  

• True
• False

Preferred stockholders get dividends before common stockholders.

• True
• False