Study Guide
Which of the following is an organization formed by individuals, who usually pool their resources, to market products?
A Cooperative A cooperative is an organization formed by individuals who usually pool their resources to gain an advantage in the market
Which of the following offers tax advantages of a partnership and liability advantages similar to a corporation, but allows for unlimited shareholders?
A Limited Liability Company A limited liability company combines the tax advantages and management flexibility of a partnership with the limited liability of a corporation.
Which of the following generally has unlimited transferability of ownership interests?
A corporation and a limited liability company, but not a general partnership.
Which of the following is a partnership agreement in which company members hold transferable shares while all the goods of the company are held in the names of the partners?
A joint stock company
Which of the following is FALSE regarding a sole proprietorship?
A sole proprietor is not personally liable for obligations of the business. This is False B/C A sole proprietor is personally liable for any losses or obligations associated with the business.
Which of the following is a way that a corporation can avoid double taxation?
By Forming an S Corporation
Which of the following is a type of partnership? A. Limited partnerships B. General partnerships C. Limited liability partnerships D. All the above E. Limited partnerships and general partnerships, but not limited liability partnerships
D. All of The Above Limited Partnerships, General Partnerships, and Limited Liability Partnerships are all types of Partnerships
Which of the following is FALSE regarding limited liability companies?
E. Owners of an LLC are referred to as incorporators. LLC owners are referred to as members.
The Mexican limited liability company is derived from the model in which of the following countries?
Germany
Which of the following is FALSE regarding a partnership?
In most cases partners do not have personal liability for losses. -The major disadvantage of partnerships is that partners are personally liable for the firm's debts.
Which of the following is distinguishable from other forms of partnerships because the partners' liability for professional malpractice is limited to the partnership?
Limited Liability Partnership
In which of the following may investors share in profits but do not share in management responsibilities and do not incur personal liability?
Limited Partnership
Which of the following is responsible for managing the business of a corporation?
Members of the Board of Directors
Which of the following is responsible for running the day-to-day business of a corporation?
Officers
Which of the following is a voluntary association between two or more persons who co-own a business for a profit?
Partnership
Investor-owners of a corporation are called which of the following?
Shareholders
Which of the following is the most popular form of business ownership in the U.S.?
Sole Proprietorship
Which of the following is Germany's equivalent to the sole proprietorships?
Sole Traders -Sole proprietorships are popular in Germany too, although Germans call them "sole traders."
A person who decides to go into business on his or her own without further formality forms a(n) _____.
Sole proprietorship
Which of the following is not generally terminated on the death of the owner or partner?
Sole proprietorships
Which of the following was the result in the case in the text, Mary Kay, Inc., A/K/A Mary Kay Cosmetics, Inc. v. Janet Isbell, involving whether the defendant had a franchise that was wrongfully terminated?
That under State Law, No Franchise Existed. ********FIND NEW CASE FROM TEXT******
Which of the following governs partnerships in most states in the absence of an express agreement?
The Uniform Partnership Act -The Uniform Partnership Act governs partnerships in most states in the absence of an express agreement.
Which of the following is TRUE regarding corporations?
The corporation must pay taxes on profits, and shareholders must pay taxes on dividends they receive from the corporation. The corporation must pay taxes on its profits, and its shareholders must pay taxes on the dividends (distributions of those profits) they receive from it.
Which of the following is FALSE regarding a limited partnership?
There must be at least two limited partners. -A limited partnership is a partnership consisting of one general partner and at least one limited partner who does not have any part in the management of the business.
Which of the following is true regarding S corporations?
They are often formed under federal law.
