Legal Forms of Business Quiz

Which legal form of business is owned and operated by a single individual?

• Sole proprietorship
• Partnership
• Corporation
• Cooperative

What is the main advantage of a sole proprietorship in terms of decision-making?

• Decisions are made by committee
• Easy and quick decision-making
• Decisions require shareholder approval
• Decisions are made by board of directors

In a partnership, what document outlines the terms and conditions of the business arrangement?

• Articles of incorporation
• Partnership deed
• Memorandum of association
• Franchise agreement

What is the maximum number of partners allowed in a typical partnership?

• 10
• 15
• 20
• 50

Which type of partner contributes capital but does not participate in day-to-day operations?

• Active partner
• Dormant partner
• Minor partner
• Quasi partner

What is the main difference between a private limited company and a public limited company?

• Number of shareholders
• Type of business activities
• Ability to sell shares to the public
• Tax obligations

What is the minimum number of members required to form a public limited company?

• 2
• 5
• 7
• 10

Which of the following is an advantage of a limited liability company?

• Simple formation process
• Personal liability for company debts
• Limited number of shareholders
• Protection of personal assets

What is the main purpose of a cooperative society?

• Maximizing profits for shareholders
• Providing services to members
• Expanding global market share
• Minimizing tax obligations

Which principle of cooperatives ensures that membership is open to all?

• Democratic control
• Open and voluntary membership
• Economic participation
• Autonomy and independence