Chapter 6 - Quiz

About three-quarters of businesses in the United States are:

• sole proprietorships

• partnerships

• corporations

• franchises

To start a partnership, you need a:

• business plan

• corporate charter

• partnership agreement

• all of the above

To operate as a corporation, a company must:

• get a license

• have a board of directors

• all of the above

A corporations's owners are responsible for no more than the capital they have invested in it. What is this called?

• unlimited liability

• limited liability

A business organization that is owned and operated by its members is a:

• sole proprietorship

• cooperative

• nonprofit organization

• franchise

To run a franchise, you have to:

• invest money

• pay fees

• follow rules

• all of the above

The textbook describes a common way to classify types of businesses by the types of:

• activities they perform

• goods they produce

• services they provide

• resources they use

A producer is a type of business that:

• gathers raw goods

• makes finished products

What are the three main forms of business organization?

• corporations, proprietorships, and stockholders

• partnerships, corporations, and dividends

• sole proprietorships, partnerships, and corporations

• partner proprietorships, corporations, and sole partnerships

What does unlimited liability mean to the owner of a business?

• The owner is responsible for all the company's debts.

• The owner has limited credit.

• The corporation is dissolved when the owner dies.

• The company will fail if the owner does not have all the skills needed to run the business.