Business Test Questions

Which of the following statements about limited liability companies (LLC) is true?

All of the about statements about LLCs are true

A person who buys a franchise has the same level of control as an entrepreneur who opens his or her own sole proprietorship.

False

Articles of incorporation usually specify the life of a corporation as a certain number of predetermined years.

False

Cooperatives are regulated with the same tax laws and rates as corporations.

False

Dissolving a partnership is easier than dissolving a sole proprietorship.

False

For partnerships to be legal, they must be established in writing.

False

If the sole proprietorship acquires a legal business name, the owner then has limited liability

False

When Wachovia Bank, acquired First Union Bank Dim S.A., it was an example of a conglomerate merger.

False

_______ are corporate takedowns financed by large amounts of borrowed money.

Leveraged buyouts

Before selling stock to the public, a corporation must register with the:

Securities and Exchange Commission

One of the disadvantages of the sole proprietorship is that the owner has unlimited liability.

True

The corporation's board of directors elects the corporate officers.

True

When Ashland Plastics and Melamine Chemicals formed a joint venture to develop flame-resistant plastic sheeting, the relationship most likely ended as soon as the project was completed.

True

A _______ merger brings together companies in unrelated businesses to reduce risk.

conglomerate

A group of cotton growers in North Georgia and North Alabama pooled their resources to build a cotton gin and storage area for the ginned cotton. They marketed their cotton to textile mills under one label. This collective ownership organization is a:

cooperative

An S corporation:

does not make the owners of the corporation personally liable for its debts

The headquarters, seller, and supplier of the service of the method of operation of a franchise is called the:

franchisor

The franchisor generally does NOT provide the franchisee with:

help in employee selection

A _______ is when 2 or more companies form a special entity to undertake a specific project, usually for a specific period of time.

joint venture

A corporation's board of directors:

sets major corporate goals and policies