Legal Entities in Business Quiz

What can a legal entity do in a court of law?

• Only observe proceedings

• Sue or be sued

• Act as a judge

• Serve as a jury member

Which of the following is NOT a role a legal entity can take on?

• Buyer

• Seller

• Supplier

• Judge

Which of the following is an example of a legal entity?

• A freelance worker

• A corporation

• A family

• A hobby group

What is the primary function of a legal entity in business?

• To operate without any legal framework

• To have legal rights and responsibilities

• To function as a non-entity

• To avoid all legal recognition

What determines a business's status as a legal person in its own right?

• Its size

• Its location

• Whether it is incorporated

• Its revenue

What does it mean for a business to have a separate legal personality from its owners?

• It can operate in multiple countries

• It is recognized as a legal person

• It can change its name easily

• It can hire more employees

Which type of business entity is recognized as a legal person in its own right?

• Unincorporated

• Incorporated

• Sole proprietorship

• Partnership

What is the main disadvantage of being a sole trader?

• Limited liability

• Separate legal personality

• Personal liability for business debts

• Protection from creditors

How many main forms of incorporated organisations are there?

• Five

• Six

• Seven

• Eight

What is a cooperative society?

• A type of sole proprietorship

• A form of incorporated organisation

• A type of partnership

• A form of franchise