Business Ownership

When entrepreneurs establish a business, they

must first decide on the form of:

• a) divestiture.

• b) global expansion.

• c) joint venture.

• d) ownership.

The following are possible forms of business ownership

except for a:

• a) sole proprietorship.

• b) partnership.

• c) bureaucracy.

• d) corporation.

Joe wants to form his own business. He wants to

get started as quickly and inexpensively as possible

and has a strong desire to control the business himself.

He is confident he will be successful and wants

to keep all the profits himself. Joe’s goals indicate

he would probably choose to operate his business

as a(n):

• a) limited partnership.

• b) limited liability company.

• c) franchise.

• d) sole proprietorship.

A business owned by a single owner is referred

to as a:

• a) partnership.

• b) sole proprietorship.

• c) limited partnership.

• d) corporation.

A disadvantage of a sole proprietorship is that:

• a) sole proprietors have very little control over the

  operations of the business.

• b) sole proprietors have unlimited liability.

• c) it is more difficult and expensive to establish

  than other forms of business.

• d) its earnings are subject to higher tax rates than

  other forms of business.

• e) sole proprietors are required to share the firm’s

  profits with employees.

Partners have unlimited liability in a:

• a) general partnership.

• b) corporation.

• c) limited partnership.

• d) cooperative.

In a limited partnership:

• a) all partners have limited liability.

• b) the partnership exists only for a limited time period,

  or until a specific task is accomplished.

• c) the limited partners do not participate in management

  of the company.

• d) the partners agree to operate in a limited geographic

  area.

• e) no more than 100 partners may invest in the

  company at any one time.

When two or more people, having complementary

skills, agree to co-own a business, this agreement

is referred to as a:

• a) partnership.

• b) sole proprietorship.

• c) cooperative.

• d) corporation.

• e) joint venture.

A general partnership that protects a partner’s personal

assets from the negligence of other partners

is called a:

• a) limited liability company.

• b) cooperative.

• c) private corporation.

• d) master limited partnership.

• e) protected partnership.

A corporation is:

• a) easier to form than other types of businesses.

• b) a state-chartered entity that is legally distinct

  from its owners.

• c) a business that is owned and operated by a

  government agency.

• d) a form of business that is legally exempt from

  paying taxes on earnings.

• e) simply another term for a large sole

  proprietorship.