BUS 101: Chapter 6 Practice Quiz

A(n) _____ can operate under simpler arrangements than conventional corporations.

statutory close corporation

The benefits of a general partnership include its _____.

ability to pool financial resources

A _____ is a form of business ownership in which the business is considered a legal entity that is separate and distinct from its owners.

corporation

A _____ is a type of franchising arrangement in which the franchisor makes a product and licenses the franchisee to sell it.

distributorship

When a business that is incorporated in one state does business in other states, it is called a(n) _____ in the state where it is incorporated.

domestic corporation

In the context of corporate restructuring, a common objective of a horizontal merger is to:

improve efficiency by eliminating duplication of facilities and personnel

A sole proprietorship is a form of business ownership in which:

a single owner actively manages the company

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

Retention of control

Which of the following statements is true of the formation of a partnership?

Partnerships can be established based on a simple verbal agreement

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

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

Which of the following statements is true of franchises in the United States?

They offer access to a proven business system and product.

Which of the following statements is true of forming C corporations?

They require the adoption of corporate bylaws.