Business Principles: Chapter 4

According to the U.S. Bureau of the Census, which form of business ownership is the least used in the U.S.?

A partnership

Which of the following forms of business organizations restricts the number and types of shareholders and is difficult to form and operate?

An S corporation

__ is a legal document that the state issues to a company based on information the company provides in the articles of incorporation.

Corporate charter

___ are profits of a corporation that are distributed in the form of cash payments to stockholders.

Dividends

Which of the following is an advantage of a sole proprietorship?

Ease of dissolving the business

Which of the following is not a disadvantage of forming a partnership?

Fewer regulatory controls than in a corporation

Which of the following is an advantage of a sole proprietorship?

It is easy and inexpensive to form.

Which of the following statements is true of joint ventures?

It is popular in situations that call for large investments

Which of the following is a disadvantage of sole proprietorship?

Lack of continuity

Which of the following is an advantage of a partnership?

Lack of regulatory control

Which characteristic of a sole proprietorship can be considered both an advantage and a disadvantage?

Taxation

Which of the following statements is true of taxation in partnership?

They pay taxes at the income tax rate for individuals

Compared to other forms of business ownership, sole proprietorships have the greatest degree of secrecy.

True

Sole proprietorships typically employ less than 50 people.

True

When are limited partnerships generally used?

When a project is risky and the chance of loss is great

Which of the following forms of business ownership provides limited liability, but is taxed like a partnership?

a limited liability company

Which of the following is a corporation that provides a service, but does not focus on earning profits, nor is it owned by the government?

a nonprofit corporation

The legal documents that identify the basic agreements between partners are called:

articles of partnership

A(n) __ is elected by the stockholders of a corporation to oversee its general operation and set long-term objectives.

board of directors

A corporation doing business outside the state in which it is chartered is known as a(n) ___ corporation.

foreign

A written authorization that assigns a stockholder's voting privilege to another is called a:

proxy

The income earned in sole proprietorship is:

taxed as personal income

The decision-making process in a partnership tends to be faster when:

there are two partners and both of them are involved in the day-to-day activities of the business

Which of the following statements is true of preferred stockholders?

they have a claim to profits before other stockholders do

A private corporation is one:

whose stock is not traded in public markets