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Which of the following factors should be considered while choosing the proper legal form for a business?

• Packaging of the product

• Location of the factory

• Nature of the business

• Name of the product

Which of the following is true about proprietorship?

• It is frequently used in finance, insurance, and real estate.

• It is the most popular form of business in the United States.

• It accounts for the largest share of retail revenues generated in the United States.

• It is owned by two persons who have unlimited liability for its debts and obligations.

In the United States, finance, insurance, and real estate use the ​ (a)   _ form of business more frequently than do the other industries.

• partnership
• corporation

• cooperative

• proprietorship

The (a)   form of business generates significant revenues in services, trade, and construction in the United States.

• partnership

• cooperative

• corporation

• proprietorship

Which of the following is an advantage of a proprietorship?

• It makes it easy for the owner to obtain credit.

• It offers unique tax advantages.

• It continues to legally exist even after the proprietor's death.

• It provides access to unlimited capital.

Small business owners prefer a proprietorship over other forms of business because it: (a) provides access to unlimited capital. (b) ensures that the business has an unlimited life. (c) provides relative freedom of action and control. (d) makes it easy for the owner to obtain credit.

• provides access to unlimited capital

• ensures that the business has an unlimited life

• provides relative freedom of action and control

• makes it easy for the owner to obtain credit

A partnership is a form of business that is: (a) formed for only civic, educational, charitable, and religious purposes. (b) organized to provide a professional service for which each shareholder is licensed. (c) owned by two people who share ownership of a single business. (d) created to obtain financial sources from only one person.

• formed for only civic, educational, charitable, and religious purposes.

• organized to provide a professional service for which each shareholder is licensed.

• owned by two people who share ownership of a single business.

• created to obtain financial sources from only one person.

Which of the following is an advantage of a partnership?

• Each partner has limited liability for the debts of a business.

• Each partner is responsible only for his or her acts.

• A business continues to exist even after the death of any one partner.

• More capital can be raised since good credit may be available.

A disadvantage of a partnership is that: (a) financial resources are obtained from one person only. (b) each partner is responsible for the acts of every other partner. (c) specialized skills of difficult to find in the individual partners. (d) there are inadequate management and employee skills.

• financial resources are obtained from one person only

• each partner is responsible for the acts of every other partner

• specialized skills of difficult to find in the individual partners

• there are inadequate management and employee skills

What is the purpose of the Uniform Partnership Act (UPA)?

• It legally terminates a business upon the death of a partner.

• It governs partnerships in the absence of other expressed agreements.

• It provides the protection of limited liability for shareholders.

• It ensures that one partner in a partnership business is not held responsible for all the debts of the firm.