Unit 1/2 Quiz

Which of the following best describes the term limited liability? If the business fails:

• Personal possessions of the owner can be taken to pay any debts

• The owner is personally liable for all the debts of the business

• There is no limit on the amount the owner has to pay to settle debts

• The owner only loses the amount invested in the business

Which type of legal structure is used when two or more people join together to start a business and have unlimited liability?

• Sole trader

• Partnership

• LTD

• PLC

Which of the following is a drawback for an entrepreneur setting up a business as a sole trader?

• Profit is shared

• Financial accounts are kept private

• Limited liability

• Unlimited liability

Who is an entrepreneur?

• someone who works for a large company

• someone who studies business in University

• someone who starts their own business

Which of the following is the definition for sole proprietorship

• business investment that involves renting or leasing another successful business model
• unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States
• unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm
• form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

A ________ must name a board of directors that will make the major policy and financial decisions for the business.

• limited liability company
• proprietorship
• corporation
• limited liability partnership

Which type of legal structure is used when two or more people join together to start a business and have unlimited liability?

• Sole trader

• Partnership

• LTD

• PLC

What is the most common form of business ownership?

• Corporation
• Company
• Sole Proprietorship
• LLC

Only liable for up to the amount invested into the company, and has little to no voice in management.

• General Partner
• Proprietor
• Limited Partner
• Corporation

What is a form of business ownership in which 2 or more people jointly owns a business

• Sole Proprietorship
• Company
• Partnerships