Chapter 2 - Fambus

What is the legal title of a thing or control over things owned?

• Possession

• Ownership

• Management

• Control

Which form of business organization is the simplest and oldest?

• Partnership

• Corporation

• Sole Proprietorship

• Cooperative

In a sole proprietorship, who assumes all the risks and derives all the profits from operations?

• Sole Proprietor

• Manager

• Employee

• Investor

What is the main advantage of a sole proprietorship in terms of profits?

• Personal Pride of Ownership

• High Taxes

• Profits not shared

• Shared Profits

What is the main disadvantage of a sole proprietorship in terms of risk?

• Limited Judgment and Wisdom

• Risk of Loss (Unlimited Liability)

• Problems of Management

• Uncertain Future

What is the main advantage of a partnership in terms of capital?

• Simple Organization

• Low Taxes

• Better Management

• More Capital Available

What is the main disadvantage of a partnership in terms of disagreement?

• Possibility of Disagreement

• Risk of Dissolution

• Limited in Size

• Unlimited Liability of Partners

What is the main advantage of a corporation in terms of liability?

• Liquidation of Investment is Easier

• Greater Stability of Existence

• Shareholders are liable beyond their investment

• More Capital Accumulated

What is the main disadvantage of a corporation in terms of control?

• Limitations on Corporate Activities

• Special Reports to be Submitted

• Pay Taxes

• Increased Clerical Work

What type of corporation is organized for the purpose of carrying out the objectives of the state?

• Stock Corporation

• Non-Stock Corporation

• Private Corporation

• Public Corporation