Business Organization and Globalization Quiz

What is the oldest and most popular form of business organization?

• Sole trader/Sole Proprietor

• Public limited company

• Partnership

• Private limited company

What is the financial obligation of business owners in the event of business failure in a sole trader business?

• Repay business debts using company assets only

• No financial obligation

• Repay all business debts

• Repay only a portion of business debts

Which type of corporation offers limited liability to all of its owners?

• Public limited company

• Nonprofit corporation

• S corporation

• C corporation

What is the main advantage of an S-Corporation in terms of taxation?

• Profits are taxed twice

• Profits are not taxed at all

• Profits are taxed at a higher rate

• Profits are only taxed once at the shareholder’s personal tax rate

What is the main purpose of a nonprofit corporation?

• To maximize profits for the owners

• To provide goods and services to the public

• To avoid paying taxes

• To make money for the owner's profit

What occurs during a divestiture in a corporation?

• The company acquires new operations

• The company goes bankrupt

• The company transfers ownership of some operations to investors or another company

• The company merges with another corporation

What is the main advantage of franchising for a franchisee?

• Access to a recognized brand name

• No ongoing royalties

• No initial franchise fee

• Complete independence

What is the main disadvantage of franchising for a franchisee?

• Complete independence

• No ongoing support

• No system-wide image

• Ongoing royalties and advertising fees

What is the main advantage of globalization for companies?

• Increased pollution

• Access to cheaper raw materials and labor through outsourcing

• Decreased competition

• Loss of jobs

What is the benefit of international trade for consumers?

• Less competitive market

• Higher prices

• Limited access to goods and services

• More competitive pricing