Chapter 6

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Sole proprietors have _____ liability for the debts of their companies

The owners are not personally responsible for the obligations of a company.

Which of the following is a consequence of a corporation being a separate entity from its owners?​

​there is difficulty in withdrawing from the company.

​A disadvantage of a general partnership is that:

​they have limited ability to raise the funds necessary to finance growth.

​A key reason most sole proprietorships remain relatively small is that:

a board of directors

​The individuals who are elected by stockholders of a corporation to represent their interests are known as _____.

False

​The owner of a sole proprietorship must share any after-tax profits with the company's shareholders. T/F

True

​There is no limit on the number of partners who can participate in a general partnership. T/F

They are made to pay an annual franchise tax in many states.

​Which of the following is a characteristic of limited liability companies (LLCs)?

The franchisee has no flexibility as it is required to follow the franchisor's procedures to the letter.

​Which of the following is a disadvantage of franchising?

The shareholders have limited liability in the firm.

​Which of the following is an advantage of a C corporation?


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