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WorksheetsTypes of Business Ownership
Total questions: 20
Worksheet time: 10mins
What do business owners consider when they select a business ownership structure?
Personal circumstances, type of business, and product mix
Product versatility, financial needs, and advertising strategies
Personal circumstances, financial needs, and type of business
Product versatility, advertising strategies, and personal circumstances
“To form my business, I used all of my savings and borrowed from the bank, and I’m personally liable for all of the debts.” This is an example of which of the following forms of business ownership:
Partnership
Sole proprietorship
Corporation
Cooperative
John, Robert, and Charles were college friends who wanted to start a business. John has creative ability, Robert’s expertise is selling, and Charles’ expertise is management. However, each has limited capital. The ideal business ownership for these young men is a
merger.
partnership.
franchise.
corporation.
If all of the individuals who own a business share unlimited liability for the business’s losses, these individuals are part of a(n)
private corporation.
general partnership.
"S" corporation.
"C" corporation
Lois and Lora plan to open a florist shop. Lois is unable to devote full time to the daily operations of the shop but wishes to provide financial support. Which form of business partnership
is most likely to appeal to Lois?
Private
Nonprofit
General
Limited
The Scott Company decided to sell stock to raise capital. Under what form of business organization does the company operate?
Corporation
Cooperative
Partnership
Sole proprietorship
What type of corporation may be owned by just a few people and does not offer its shares for sale to the general public?
Limited
Franchise
"C"
Private
A type of state-chartered corporation that was developed to help small businesses by taxing them as individuals in a partnership is a(n) __________ corporation.
"S"
"C"
private
limited
What type of corporation sells millions of shares and must furnish complete information about its earnings, assets, and debts?
"C"
Private
"S"
Limited
The American Red Cross is an example of a(n) ___________ corporation.
hybrid
nonprofit
"S"
"C"
One of the characteristics of the form of business ownership known as an LLC is that
this kind of business can last indefinitely.
it is required to have at least three owners (members).
the IRS collects taxes based on the LLC’s gross income.
the owners’ personal property cannot be taken to pay the business’s debts.
One reason a physicians’ practice might form a partnership as an LLP is to
ensure that the business experiences unlimited liability.
take advantage of higher dividend returns on shares of its stock.
protect innocent partners from the malpractice of another partner.
permit the general public to purchase licensing rights in the practice.
Wendy’s sells the right to operate its restaurants to individuals who meet the company’s criteria. The arrangement between Wendy’s and these individuals is an example of
a partnership agreement.
multi-level marketing.
licensing.
franchising.
Jake wanted to run his own business but was unsure that he had adequate business skills to be successful. Which type of business would give Jake the help he needs?
Private corporation
Sole proprietorship
Business-format franchise
Product trade-name franchise
Which of the following is a characteristic of a product trade-name franchise:
It is not open to the public.
The franchise can choose the name of the business.
The franchisee has unlimited liability.
It is owned by shareholders.
Jane is the owner of a pizza shop associated with a national chain of pizza restaurants. She established her business in a regional supermarket. The pizza shop is referred to as a
host franchise.
strategic alliance.
master license.
piggyback franchise.
Olivia runs a home-based business that distributes high quality, handmade baskets. She sells the products and earns commissions on the baskets sold by four other basket representatives. This is an example of
product licensing.
product trade-name franchising.
multi-level marketing.
strategic partnering.
Illegally run organizations that emphasize the collection of high fees from potential product distributors are often referred to as
pyramid schemes.
pressure-cooker tactics.
marketing rackets.
deceptive advertising gimmicks.
ABC Specialty Wear is the only company that has written permission to use a national football team’s logo on its sportswear. This is an example of a
product trade-name contract.
sole propietorship.
licensing agreement.
limited joint-venture contract.
Which of the following statements is true regarding joint ventures:
Joint-venture arrangements are usually short-term relationships.
Joint ventures are used only when it is necessary to raise a lot of capital.
Large corporations are the only business structures that can benefit from joint ventures.
An independent attorney must always be consulted before signing a joint-venture agreement.
