Quiz on Sole Proprietorships

What is a disadvantage of a sole proprietorship?

• Limited funds

• Shared profits

• Complex management

• High taxes

How do most people raise funds to start a sole proprietorship?

• Selling stock

• Getting loans from banks, investors, family, or friends

• Issuing bonds

• Crowdfunding

What is a key reason for the failure of sole proprietorships?

• Unlimited liability

• Limited funds

• Excessive profits

• High employee turnover

What is a partnership in business?

• A business owned by a single individual

• A business co-owned by 2 or more partners

• A business owned by a corporation

• A business owned by the government

What is a key characteristic of limited liability partnerships (LLPs)?

• All partners have unlimited liability

• Partners are not responsible for each other's debts

• Only one partner is liable for debts

• Partners must be involved in daily operations

What are shares of ownership in a corporation called?

• Stocks

• Bonds

• Dividends

• Assets

What do stockholders receive if a corporation earns a profit?

• Dividends

• Interest

• Salaries

• Bonuses

What is one disadvantage for a franchisee?

• Having to invest a lot of money with no assurance of success

• Complete control over product decisions

• No need to share profits

• Guaranteed success

What must a franchisee share with the franchiser?

• Some of their profit

• Their personal assets

• Their business secrets

• Their employees

What is one benefit of franchising for the franchiser?

• The franchisee's success would affect them positively

• They have no responsibilities

• They receive all the profits

• They have complete control over all operations