Forms of business ownership

Which of the following are the characteristics of a public corporation?.

• (1) The government participates in its daily operations

• (2) The chairperson of the board of directors is appointed by the government

• (3) It is a separate legal entity

Ken and Tracy plan to establish and operate a restaurant together, in which the withdrawal of eithersidewould not lead to its closure. Which form of business ownership should they adopt?

• A. partnership

• B. public corporation

• C. private limited company

• D. listed company

Which of the following statements about joint venture is/are correct?

• (1) The business risk is shared by the joint venture partners.

• (2) The joint venture will normally be dissolved when the joint project is completed.

• (3) A joint venture is a new business entity formed by at least two businesses.

Which of the following statements about the Ocean Park corporation, a public corporation in Hong Kong, are correct?

• (1) It is listed on the Hong Kong Stock Exchange

• (2) Its board of directors is appointed by the government

• (3) It is self-sufficient financially.

Which of the following statements about a joint venture is/are correct?

• (1) A joint venture is required to disclose its financial statements to the public.

• (2) A joint venture is an entity separate from the joint venture partners.

• (3) The joint venture partner who invested the most capital has the right to make the final decisions of the business operations.

Which of the following companies is/are multinational corporation(s)?

• (1) A Hong Kong company which purchases raw materials from Thailand.

• (2) A Mainland company which issued bonds in Hong Kong to raise funds.

• (3) A Hong Kong company which established a branch in Singapore.

Which of the following statements about a franchise business is/are correct?

• (1) A franchisee is not required to pay royalties to the franchisor when his franchise business incurs a loss.

• (2) The franchisor and all its franchisees operate the business in the same country.

• (3) With the franchisor’s approval, a franchisee could have a mode of operations different from other franchisees.

Which type of partner is Partner B?

• general partner

• limited partner

• nominal partner

Tim is a sole trader operating a shop selling organic skincare products. Candy invited him to be a partner of her business, which sells olive oil skincare products imported from Italy. Explain to Tim two advantages of forming a partnership with Candy, rather than operating his business on his own.