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Understanding Sole Proprietorships

Total questions: 54

Worksheet time: 28mins

Name
Class
Date
1.

proprietorship is operated by...

a)
a corporation
b)
a partnership
c)
a group of individuals
d)
an individual
2.

proprietorship is the most....

a)
least common form of business organization
b)
most complex form of business organization
c)
common form of business organization
d)
most expensive form of business organization
3.

proprietorship has the lowest?

a)
Startup costs
b)

Sales revenue

c)
Tax obligations
d)
Liability exposure
4.

proprietorship pros

a)

Easy and Cheap to start

b)

Owner keeps all profits

c)

Full control

d)

Taxes are insufferable

5.

proprietorship cons

a)
Ability to easily transfer ownership
b)

Ends if you die/quit

c)

Unlimited liability

d)

Hard to raise money

e)

limited skills/ resources

6.

A partnership is

a)
A partnership is a type of loan agreement.
b)
A partnership is a sole proprietorship.
c)
A partnership is a government contract.
d)
A partnership is a business arrangement between two or more individuals or entities.
7.

General partner is...

a)

Runs the business and has full liability

b)
An investor who only provides capital without any responsibilities.
c)
A member of a corporation with limited liability.
d)
A silent partner with no management role.
8.

Limited person is...

a)
A person with unlimited abilities.
b)
A person who is always successful.
c)
A person without any restrictions.
d)

Invests with money, have no control, and only risk is investment

9.

Partnership agreement ( Articles of partnership) should say...

a)
The partnership agreement should only include the names of the partners.
b)
The partnership agreement should focus solely on marketing strategies.
c)
The partnership agreement must be notarized by a lawyer.
d)

Decision making, duties of partner, investments plus sharing, and rules if someone leaves or dies

10.

Pro In partnership

a)

More money and skills

b)
Solo work by individuals
c)
Competition among businesses
d)
Independent contractor agreements
11.

Pro in partnership

a)
Freelance project management
b)

Shared workload

c)
Independent contractor agreement
d)
Solo professional work
12.

Con of Partnership

a)

Unlimited liability

b)
No formal agreements required for operations.
c)
Unlimited profit sharing among partners.
d)
Complete control over business decisions by one partner.
13.

Con for partnership

a)
Enhanced communication between partners.
b)

Possible conflicts

c)
Increased profits for all partners.
d)
Greater flexibility in decision-making.
14.

Con for partnership

a)

Profits shared

b)
Increased financial resources.
c)
Enhanced decision-making speed.
d)
Stronger individual accountability.
15.

Cons of partnerships

a)

Harder to dissolve

b)
Simplified tax structure
c)
Full control over decisions
d)
Increased profits
16.

C corporation is a legal person created by...

a)

Law

b)
international organizations
c)
local government
d)
federal government
17.

C corporation is where you can own property and....

a)
sell stocks and bonds.
b)
manage personal finances.
c)
provide legal advice.
d)

Borrow money and sue

18.

With C corporation only of businesses but __ of sales.

a)
20% of businesses but 40% of sales.
b)
10% of businesses but 30% of sales.
c)

17% of businesses but 81% of sales.

d)
15% of businesses but 50% of sales.
19.

Ownership is...

a)
the act of giving something away
b)
a legal document for property transfer
c)
the process of renting an item
d)
the state of having control over something
20.

Stock is...

a)
a type of bond
b)
a form of currency
c)
shares of ownership in a company
d)
a government grant
21.

Stockholder is...

a)
A person who manages a corporation's daily operations.
b)
An individual who invests in government bonds.
c)
A shareholder who has no voting rights in a company.
d)

Owner of stock

22.

Closed corporation=

a)
A corporation with a limited number of shareholders that does not publicly trade its shares.
b)
A corporation that is publicly traded on the stock exchange.
c)
A corporation with unlimited shareholders and no restrictions on share transfer.
d)
A type of partnership that limits liability for all partners.
23.

Open Corporation=

a)
A privately held company.
b)
A non-profit organization.
c)
A government agency.
d)

A publicly traded company and can be sold to anyone

24.

What is incorporate ? Where do you do it?

a)
Incorporate by filing articles of incorporation with the state government.
b)
You do it by submitting a form to your local bank.
c)
Incorporate by creating a business plan and presenting it to investors.
d)
Incorporate by signing a contract with a partner.
25.

Domestic corp is...

a)
A company that operates internationally without a home base.
b)
A business that is only registered in foreign countries.
c)
A corporation that has no physical presence or employees.
d)
A company incorporated and operating within its home country.
26.

Foreign crop is...

a)
A plant that grows only in tropical regions.
b)
A type of fertilizer used for local crops.
c)

Operating outside home state

d)
A crop that is native to the country where it is grown.
27.

Alien corp is...

a)
a real company specializing in technology
b)

Charted abroad but does business in U.S.

c)
a government agency for space exploration
d)
a video game character from a popular franchise
28.

What are stockholder rights

a)
Rights to dictate company policies
b)
Rights to unlimited profit sharing
c)
Rights to appoint all board members
d)
Stockholder rights include voting rights, rights to dividends, rights to inspect corporate records, and rights to participate in asset distribution.
29.

Common stock is..

a)
Debt instruments issued by a corporation.
b)
Shares that guarantee fixed dividends regardless of company performance.
c)
A type of preferred stock with no voting rights.
d)
Ownership shares in a corporation that provide voting rights and potential dividends.
30.

Preferred stock is...

a)

No votes, but gets dividends first

b)
a type of common stock with no voting rights
c)
a type of debt security with variable interest rates
d)
a type of equity security that pays dividends only when profits allow
31.

What is Dividend?

a)
A dividend is a loan taken by the company from shareholders.
b)
A dividend is a tax imposed on company profits.
c)
A dividend is a distribution of a portion of a company's earnings to its shareholders.
d)
A dividend is the total revenue generated by a company.
32.

What is proxy?

a)
A proxy is a type of computer virus that infects servers.
b)
A proxy is a software that only stores data locally.
c)
A proxy is an intermediary server that forwards requests and responses between a client and another server.
d)
A proxy is a hardware device that boosts internet speed.
33.

Board of directors are..

a)
A team of employees responsible for daily operations.
b)
A group of shareholders who invest in the company.
c)
A group of individuals elected to oversee a company's activities and make key decisions.
d)
An advisory board that provides recommendations to management.
34.

What are Corporate officers

a)

CEO, the president run daily operations

b)
Corporate officers are entry-level employees in a company.
c)
Corporate officers are responsible for managing only the marketing department.
d)
Corporate officers are external consultants hired for short-term projects.
35.

Pro for C corporation

a)
High tax rates on corporate income
b)
Unlimited personal liability for shareholders
c)
Restrictions on foreign investment
d)
Limited liability protection and ability to raise capital through stock sales.
36.

Pro for C corporation

a)
Unlimited personal liability for shareholders.
b)
Inability to issue stock or raise capital.
c)
Higher tax rates compared to other business structures.
d)

Easier to raise money

37.

Pro for C corporation

a)

Long lifespan

b)
Unlimited personal liability for shareholders
c)
Restrictions on foreign investment
d)
High tax rates on corporate income
38.

Con of C corporation

a)
Double taxation of income.
b)
No restrictions on the number of shareholders.
c)
Easier access to capital than S corporations.
d)
Limited liability for shareholders.
39.

Cons for C corporation

a)

Lots of paper works

b)
Simplified tax reporting
c)
Easier access to capital
d)
No personal liability for shareholders
40.

Cons for C corporation

a)
Simplified tax reporting process
b)
No personal liability for shareholders
c)

Expensive start

d)
Easier access to capital funding
41.

S corporation is ...

a)
A type of corporation that pays corporate taxes.
b)
A type of partnership that allows for limited liability.
c)
A type of corporation that cannot have more than 100 shareholders.
d)

Taxed like a partnership, but with limited liability

42.

The rules for S corporation

a)
An S corporation can have unlimited shareholders from any country.
b)
An S corporation must have multiple classes of stock.
c)
An S corporation is required to be a foreign corporation.
d)

<100 stockholder, must be U.S individuals/trust one stock class

43.

Limited Liability Company is

a)
A partnership structure with unlimited liability.
b)

Blend of corp and partnership. No double tax, flexible, and fewer restrictions

c)
A government program for small businesses.
d)
A type of insurance policy for businesses.
44.

Non-profit corporation is

a)

Mission based(education, charity, and religion), not profit

b)
A government agency that regulates non-profit activities.
c)
An organization that provides services for a fee.
d)
A business that aims to maximize shareholder profits.
45.

What is a Joint venture in a simple term?

a)
A joint venture is a temporary agreement to share office space.
b)
A joint venture is a merger of two businesses into one.
c)

Partnership for a project and ends when the project is done.

d)
A joint venture is a type of loan between two companies.
46.

Syndicate?

a)
A type of financial institution.
b)
A legal document for business transactions.
c)
A method of communication between companies.
d)

Group pooling money for a large task, ends when the task is done.

47.

Internal growth is...

a)
the process of downsizing to improve efficiency.
b)
the acquisition of another company to increase market share.
c)

the expansion of products, markets, and operations.

d)
the use of external funding to expand operations.
48.

Mergers and acquisitions are...

a)
Mergers and acquisitions are processes that only affect small businesses.
b)
Mergers and acquisitions are only about selling companies.
c)

Mergers and acquisitions are when companies combines or one buys another

d)
Mergers and acquisitions involve only government entities.
49.

The type of mergers are...

a)
Horizontal, vertical, conglomerate, market-extension
b)
mergers, acquisitions, partnerships, joint ventures
c)
horizontal, vertical, operational, geographic
d)
financial, operational, strategic, product-extension
50.

Horizontal mergers are...

a)
Horizontal mergers are mergers between companies in the same industry.
b)
Mergers that involve the acquisition of a competitor's assets.
c)
Mergers between companies in different industries.
d)
Mergers that occur between companies in unrelated sectors.
51.

Vertical mergers are...

a)

Supply chain levels

b)
Collaborations between companies for joint ventures
c)
Acquisitions of companies by private equity firms
d)
Mergers between companies in the same industry
52.

Conglomerate mergers are...

a)
mergers focused on expanding product lines
b)
mergers between companies in unrelated businesses
c)
mergers between companies in the same industry
d)
mergers that create a monopoly
53.

Acquisition is...

a)
the act of selling something
b)
a type of financial investment
c)

One company buys another

d)
the process of losing possession of something
54.

Hostile takeover is...

a)

When managers don't approve but purchase happens anyway.

b)
A hostile takeover is a government intervention in corporate mergers.
c)
A hostile takeover is when a company voluntarily sells itself to another company.
d)
A hostile takeover is a friendly acquisition supported by the target company's management.

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