OBJ 1.05

A form of business ownership that operates under a charter issued by the state is called a(n):

• Partnership

• Corporation

• Sole Proprietorship

• Franchise

Joan borrowed $10,000 from a relative to start her own business. Assuming she takes all responsibility for the company's financial risks, the company is most likely a:

• Partnership

• Corporation

• Sole Proprieorship

• Limited Liability Company

A business that is owned by two or more people who share the risk of loss and the chance for profit is known as a:

• Corporation

• Sole Proprietorship

• Franchise

• Partnership

The business agreement under which a business distributes the goods or services of a parent company is called a:

• Corporation

• Franchise

• Limited Partnership

• Sole Proprietorship

Which of the following is a characteristic of a business-format franchise:

• Independence in creating the brand name

• Minimal involvement from the parent company

• The franchisee is granted rights to use a business model and brand

• Limited liability for the franchisee

What type of business is owned by stockholders who share the business's profits?

• Sole Proprietorship

• Corporation

• Franchise

• Partnership

A type of business ownership in which one or more of the owners does not have full liability is called a:

• Sole Proprietorship

• Corporation

• Limited Partnership

• General Partnership

To sell sweatshirts, jackets, and T-shirts imprinted with ABC University's logo, the Collegiate Sportswear Company pays royalties to the university. What type of business ownership does this situation exemplify?

• Licensing

• Partnership

• Franchise

• Sole Proprietorship

Mr. Brown has inherited a small sum of money, and he wants to become a business owner. However, he has a full-time job that he plans to keep and very little time to operate his own business. What type of ownership should he consider?

• General partnership

• Franchise

• Corporation

• Sole proprietorship

Which of the following is a benefit of the business-format franchise arrangement:

• The franchisee has full control over the business model

• The franchisee receives assistance in financing

• The franchisee is free to modify the parent company’s products

• The franchisee bears all the risks without guidance from the franchisor