Entrepreneurship Unit 1 Module 1

An organization that has a separate legal identity from its owners is BEST termed

• corporate organization

• non-corporate organization

• limited liability organization

• unlimited liability organization

All of the following statements reflect non-corporate organizations EXCEPT

• All sole traders and partnerships are non-corporate organizations.

• In non-corporate organizations the owner and the business have separate identities.

• Public and private companies are not non- corporate organizations.

• In non-corporate organizations the owner and the business is one and the same.

Mr. Skinner invested $1 000 000 on the stock exchange in a public company. He will face a situation of

• limited franchise

• limited liability

• unlimited liability

• unlimited debt

Mr. Valdez is a sole trader, he knows that if the venture fails he would be liable for all debts of the business and may have to use his personal assets to meet the obligations. This outlines a situation of

• unlimited liability

• limited liability

• risk taking

• bankruptcy

A form of organization where the owner has total control of the business and is liable for all debts incurred is specifically

• franchise

• limited liability company

• partnership

• sole trader

1. Which of the following statements outline key characteristics of a sole trader?

I. low start up costs

II. two or more owners

III. owner has control of all decision making

IV. unlimited liability

• I, II, III and IV

• I, II and IV

• I, III and IV

• II, III and IV

Which of the following is NOT a key disadvantage of a partnership?

• unlimited personal liability

• one can be held responsible for a partner's negligence

• easier than a sole trader to access financing

• shared decision making can lead to conflict

The MAJOR difference between a general partnership and a limited partnership is

• In a general partnership, all income and losses accrue to all partners.

• At least one partner in the limited partnership has unlimited liability.

• The general partnership must have a written deed.

• The action of one partner in a limited partnership affects all partners.

All of the following are key components of the legal and regulatory framework for a business organization, EXCEPT

• Labour laws

• Internal Code of Conduct

• OSHA and ISO requirements

• Tax obligations

Which statement defines a limited liability company?

• A hybrid between a partnership and a sole trader.

• A hybrid between a partnership and a charity.

• A hybrid between a partnership and a corporation.

• A hybrid between a partnership and a NGO.