Entrepreneurship Chapter 7

The legal document that gives an inventor the sole right to produce, use, and sell an invention is a

• patent

• trademark

• copyright

• license

The legal forms of business that limit owners' liability are

• corporations or S corporations

• partnerships or corporations

• sole proprietorships or partnerships

• sole proprietorships or S corporations

A disadvantage of setting up as a corportation is the

• power of the board of directors

• difficulty in raising capital

• complexity and cost of establishment

• limited liability

Entrepreneurs who work for a family business must

• contribute a large amount of money

• be prepared to compromise

• make all decsions themselves

• none of these

which of the following is NOT an advantage of owning a franchise

• supplies can be less expensive

• only certain products or services may be offered

• a product or service is already established

• management and other assistance are available

which of the following is NOT a disadvantage of owning a franchise

• some profits must be retruned to the franchisor as royalty fees

• only certain products or services may be offered

• attracting customers is an uncertainty

• a large amount of inital capital is usually needed

operating costs of a franchise

• are paid by the franchisor

• include a fee for writing the franchise agreement

• include a fee for advertising

• are usually less than $1,000

an advantage of setting up a business as a corporation is the

• distribution of profits

• ability to raise capital

• taxation benefits

• ease of establishment

when buying a business, you should do all of the following EXCEPT

• have an accountant write the sales contract

• analyze financial reports for the past three years

• determine how to finance the business

• have an expert determine the value of the business

Products that are copyrighted may be identified by the ® symbol

• True

• False