Comprehensive #3

By law, the minimum capital requirements for beginning a sole proprietorship are A. established by the laws of each state. B. nonexistant generally. C. at least $1,000. D. at least $5,000. E. at least $10,000.

B. nonexistant generally.

A voluntary association of two or more people acting as co-owners of a business is known as a A. sole proprietorship. B. partnership. C. corporation. D. syndicate. E. conglomerate.

B. partnership.

With regard to taxation of partnerships, which of the following statements is correct? A. Partnership income is exempt from taxes. B. The partnership is taxed as a separate entity. C. Each partner is taxed on his / her share of the partnerships profits. D. Profits are taxed twice. E. Taxes are paid on a partnership's profits, after which each partner pays taxes on his or her share of the profits.

C. Each partner is taxed on his / her share of the partnerships profits.

Which of the following is necessary for starting a sole proprietorship? A. Articles of proprietorship B. A contract C. No specific legal documents required D. A written agreement E. An application to the secretary of state

C. No specific legal documents required

Which business forms incur "unlimited personal liability" for all owners and are viewed as an "extension" of the owner(s)? A. C-Corporations and S-Corporations B. Limited Partnerships and Limited Liability Partnerships C. Sole Proprietorships and General Partnerships D. Sole Proprietorships and LLC's E. All Forms of Partnerships (General, Limited, and LLP's)

C. Sole Proprietorships and General Partnerships

Which of the following is the most popular form of business based on the number of businesses in the U.S. ? A. Corporation B. General partnership C. Sole proprietorship D. Not-for-profit corporation E. Co-operative

C. Sole proprietorship

All business forms require A. a formal, written agreement. B. a charter and registartion with the secretary of state. C. filing tax returns with the IRS. D. filing with the SEC. E. all of the above.

C. filing tax returns with the IRS.

The simplest form of business owned and operated by more than one person is called a A. C-corporation. B. limited liability company. C. general partnership. D. S-corporation. E. sole proprietorship.

C. general partnership.

The partner who can lose only what he or she has invested in a business is the A. employee. B. manager. C. sole proprietor. D. limited partner. E. general partner.

D. limited partner.

Unless specified in the charter, a sole proprietorship has a A. perpetual life. B. life of 50 years. C. life of 17 years, which is renewable. D. legally recognized life, which varies from state to state. E. legal life limited to the life of its owner

E. legal life limited to the life of its owner