Chap 6: Business Formation True or False

The size and nature of a business and the responsibilities of the owners are key factors in choosing the best type of business ownership and organization.

• True

• False

A sole proprietor issues stock certificates to represent part ownership in the business.

• True

• False

The part of corporate profits stockholders could receive is called a dividend.

• True

• False

A partnership agreement details the rules and procedures that guide ownership and operations..

• True

• False

A corporation elects a board of directors to make major decisions for the business.

• True

• False

The franchise agreement states the duties and rights of the operator, of the franchise, and of the parent company.

• True

• False

A limited liability partnership identifies some investors who can’t lose more than the amount of their investment.

• True

• False

A corporation is always managed by one person.

• True

• False

A corporate board of directors employs managers to conduct the company’s affairs.   

• True

• False

In a Limited partnership, all of the owners make decisions about the operation of the business. 

• True

• False