Chapter 4 Review

Which form of business ownership is least common?

• Partnership

• Corporation

• Sole proprietorship

• Not-for-profit corporation

• Merger

A ________ is a form that enables stockholders to allow someone else to vote for them.

• waiver

• rights transfer

• proxy

• voter registration

• dividend

Cigna and Zurich Insurance have joined together to underwrite an extremely large insurance policy. This sort of association is referred to as a(n) _______.

• a. syndicate

• b. cartel

• c. monopoly

• d. consortium

A merger between firms in completely unrelated industries is known as a _______.

• a. conglomerate merger

• b. horizontal merger

• c. vertical merger

• d. market-extension merger

Aisha wants to start a business, but she is unsure of the most appropriate legal form for her. Short of cash, she has decided to adopt the form that is the least expensive and most flexible in terms of decision making and implementation. Which would you recommend?

• Joint venture

• Partnership

• Sole proprietorship

• Cooperative

• Corporation

Which of the following is necessary for starting a sole proprietorship?

• Limited legal documents

• An agreement

• An application to the secretary of state

• Articles of proprietorship

• A contract

Which of the following provides money for a business but has no management duties?

• General partner

• Limited partner

• Sole proprietor

• Nominal partner

• Sole partner

Ego, Melissa, and Aidy want to obtain limited liability for their business, but they want to avoid double taxation. Which type of business ownership would you recommend?

• Regular corporation

• General partnership

• Sole proprietorship

• S corporation

• Not-for-profit corporation

Mateo wants to make money, so he starts his own business as a sole proprietor. He likes this form of business because ________.

• he will get to keep all the profits the business makes

• profit is guaranteed because he will be the only owner

• it will provide a steady income for him

• he has to split the profits with only one other person

• he has to pay small dividends to the other owners

Siri owns a commercial laundry service that has been growing rapidly. To continue to grow the business, Siri needs access to more funds but she does not want to risk her personal assets. Siri contacts a lawyer to identify the legal requirements to start the process of _______.

• establishing a partnership

• selling her business

• incorporating

• consulting

• corporate opening