Deck 4: Choosing a Form of Business Ownership

Question 1

Today, there are more corporations than there are sole proprietorships and partnerships in the United States.

Answer 1

False

Question 2

For a sole proprietorship and partnership, nlimited liability is a legal concept that holds a business owner personally responsible for all the debts of the business.

Answer 2

True

Question 3

Limited partners in a limited partnership can lose no more than the money they invest in the business.

Answer 3

True

Question 4

Before a corporation can obtain a corporate harter, it must submit charter information to the county clerk where the business is located.

Question 5

The corporate officers of a corporation are elected by the stockholders.

Question 6

A corporation whose stock is bought and sold on security exchanges and can be purchased by any individual is referred to as a(n) __________ corporation.

A) closed
B) domestic
C) open
D) foreign
E) exchange

Question 7

Corporate stock that has voting rights is referred to as __________ stock.

A) charter
B) preferred
C) treasury
D) domestic
E) common

Question 8

Ease of raising capital is a characteristic of which type of ownership?

A) Cooperatives
B) Corporations
C) Sole proprietorships
D) Not-for-profit corporations
E) Foreign corporations

Question 9

A form of corporation that has no more than 100 stockholders and eliminates the problem of double taxation is a(n)

A) limited-liability company.
B) limited-liability partnership.
C) domestic corporation.
D) S corporation.
E) joint-venture corporation.

Question 10

Which of the following might a firm use to acquire another company in a hostile takeover?

A) Syndicate
B) Joint venture
C) Conglomerate merger
D) Tender offer
E) Poison pill

Question 11

There are more sole proprietorships in the United States than there are partnerships or corporations.

Question 12

The term limited partnership is used to describe a business where all partners have general partnership status.

Question 13

The people who start a corporation are called ncorporators.

Question 14

Preferred stockholders are paid dividends before common stockholders.

Question 15

A vertical merger takes place between firms in completely different industries.

Question 16

The type of business that is the easiest to form is the

A) joint venture.
B) syndicate.
C) sole proprietorship.
D) corporation.
E) partnership.

Question 17

The state of __________ offers the lowest organizational costs for a corporation.

A) New York
B) Delaware
C) Utah
D) Alaska
E) Florida

Question 18

Which of the following is an advantage of a corporation?

A) Limited liability
B) Single taxation
C) Lack of government regulations
D) Ease of formation
E) Unlimited liability

Question 19

The type of business ownership that combines the benefits of a corporation and a partnership while avoiding some of the restrictions and disadvantages of those forms of ownership is a(n)

A) pseudo corporation.
B) open corporation.
C) limited-liability company.
D) quasi-government corporation.
E) not-for-profit corporation.