Forms of Ownership

A sole proprietorship is ____.

• a business owned by a single individual

• a business owned by multiple individuals

• a government-owned enterprise

• a corporation owned by shareholders

A partnership is a type of business where ______ or more individuals share the costs and responsibilities of owning and operating it.

• two

• three

• four

• five

A corporation is a legal entity that is separate and distinct from its ______.

• owners

• employees

• creditors

• managers

A franchise is a business arrangement where a party (the franchisee) pays for the right to use a company's (the franchisor's) trademark, products, and business model.

• A business arrangement where a party pays for the right to use another company's trademark, products, and business model.

• A new company created from a merger of two companies.

• A government-regulated business licensing process.

• A type of business that operates without any brand affiliation.

A partnership agreement outlines the roles, responsibilities, and obligations of the partners.

• It outlines the roles, responsibilities, and obligations of the partners.

• It only describes financial accounting procedures.

• It solely focuses on marketing strategies.

• It is just a document stating the dissolution of a partnership.

General partners have ______ liability and have full management control of the business.

• unlimited

• limited

• partial

• restricted

Limited partners have little to no involvement in management but have a liability that's limited to their ______ in the partnership.

• investment

• capital contribution

• profit share

• operational control

If the business prospers, the owner receives all of the profits. BUT, if the business does poorly, the owner is responsible for its losses. This describes ______ liability.

• unlimited

• limited

• partial

• shared

Which type of corporation is not listed on a stock exchange?

• Privately held corporation

• Publicly held corporation

• Holding corporation

• Cooperative corporation

Some requirements for a franchise include:

• A defined business model, payment of franchise fees, and adherence to operational guidelines

• No specific requirements

• Only the payment of franchise fees

• Only a good location