Business Ownership Quiz

What is a sole proprietorship?

• A business owned by multiple partners

• A business owned by a franchisee

• A business owned by one person

• A business owned by shareholders

Which of the following is an advantage of partnerships?

• More talent and money

• Lack of continuity

• Unlimited liability

• Limited resources

What is a key disadvantage of corporations?

• Simple decision making

• Unlimited liability

• Double taxation

• Easy to set up

Which type of business ownership has limited liability for its owners?

• Franchise

• Corporation

• Partnership

• Sole proprietorship

What is a franchise?

• A partnership between two companies

• A type of corporation

• A legal agreement allowing one business to operate under another's brand

• A business owned by a single individual

Which of the following is a characteristic of a corporation?

• Easy to form

• No regulatory compliance

• Limited liability for shareholders

• Owned by a single individual

What is a disadvantage of sole proprietorships?

• Easy to set up

• All profits go to the owner

• Unlimited liability

• Simple decision making

What is the primary benefit of franchising?

• Complete control over business operations

• Access to a proven business model

• Unlimited growth potential

• No initial costs

Which of the following describes a Limited Liability Company (LLC)?

• Has unlimited liability

• Requires complex formation

• Offers limited liability and pass-through taxation

• Owned by shareholders

What is a common challenge faced by franchisees?

• High operational autonomy

• Strict compliance with franchisor guidelines

• No ongoing fees

• Unlimited growth potential