Unit 3 Test Review-Econ

A ________ must name a board of directors that will make the major policy and financial decisions for the business.

• limited liability company
• proprietorship
• corporation
• limited liability partnership

In what type of business organization is each owner personally liable for all business debts, even if the debts were created by other owners?

• corporation
• partnership
• proprietorship
• S corporation

The easiest form of business to start and end is a(n)

• limited liability partnership

• S corporation

• franchise

• Sole proprietorship

Groups of people form consumer cooperatives to 

• purchase goods and services more cheaply than they could as individuals
• reduce the amount of property taxes that each member must pay
• generate a profit for each member of the group
• increase their political power in their community

One important advantage of forming a partnership is that this form of business organization gives each owner sole control over the business.

• True

• False

Which of the following is the definition for sole proprietorship

• business investment that involves renting or leasing another successful business model

• unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States

• unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

• form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

This type of business is owned by one person.

• Partnership
• Sole Proprietorship
• Corporation
• Franchise

Advantages of this business type are that the owner is their own boss and gets to keep all the profits.

• Partnership
• Sole Proprietorship
• Corporation
• Franchise

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.

• Sole Proprietorship
• Partnership
• Corporation
• Franchise

A business owner who prefers to maintain complete control of all business activities might consider structuring the venture as a(n)

• sole proprietorship
• general partnership.
• franchise
•  corporation.