How to form a business

1. What is one major advantage of a sole proprietorship?

• A. The owner is not responsible for business debts

• B. The business is taxed separately from the owner's income

• C. All profits go directly to the owner

• D. It is easy to attract investors and raise capital

2. Which of the following is an advantage of forming a corporation?

• A. Limited lifespan

• B. Limited liability for owners

• C. Easy and cheap to start

• D. Owners must pay self-employment tax

3. Which type of corporate merger involves the joining of two firms in the same industry?

• A. Horizontal merger

• B. Conglomerate merger

• C. Acquisition

• D. Vertical merger

4. Which is true about a Limited Partnership?

• A. All partners manage the business.

• B. Limited partners have unlimited liability.

• C. Profits are shared equally.

• D. Limited partners are only liable up to their investment.

5. Which of the following is not mentioned as an advantage of buying a franchise?

• A. Complete freedom in making business decisions

• B. Lower failure rate compared to other business ventures

• C. Personal ownership of the business

• D. Management and marketing assistance

6. Which of the following best describes a cooperative?

• A. A business owned by one individual

• B. A company owned by shareholders for profit

• C. A business owned and controlled by the people who use its services

• D. A business run by the government