Question 1

In Japan,which of the following statements is false regarding limited liability partnerships?
A)In regard to profits,Japan's limited liability partnership law requires that the members manage the business and negotiate among each other to determine how profits and losses should be distributed among individual members.
B)Japan's limited liability partnership law places restrictions on the distribution of partnership assets.
C)Japan's limited liability partnership law limits the liability of its members by their capital contribution.
D)When members are establishing the rules of the limited liability partnership,Japan's limited liability partnership law requires either the agreement of all members or a majority of at least two-thirds of the members.
E)The limited liability partnership has been recognized in Japan since the 1950s.

Accepted Answer

A)The limited liability partnership was not introduced in Japan until 2005.
B)The limited liability partnership was not introduced in Japan until 2005.
C)The limited liability partnership was not introduced in Japan until 2005.
D)The limited liability partnership was not introduced in Japan until 2005.
E)The limited liability partnership was not introduced in Japan until 2005.

Question 2

A corporation can raise capital by issuing stock.

Accepted Answer

A corporation can raise capital by issuing stock, which represents ownership in the company. Investors can buy shares of stock in exchange for a portion of ownership and potential returns on their investment.

Question 3

When a person decides to go into business on his or her own without further formality,what do they form?
A)Sole proprietorship
B)Single entity
C)Sole entrepreneurship
D)Individual entity
E)Single entrepreneurship

Accepted Answer

A)If you decide to go into business on your own,you are creating a sole
proprietorship.
B)If you decide to go into business on your own,you are creating a sole proprietorship.
C)If you decide to go into business on your own,you are creating a sole proprietorship.
D)If you decide to go into business on your own,you are creating a sole proprietorship.
E)If you decide to go into business on your own,you are creating a sole proprietorship.

Question 4

A sole proprietor is considered a separate legal entity.

Accepted Answer

A sole proprietorship is not a separate legal entity. The business and the owner are considered the same entity for tax and legal purposes.

Question 5

A syndicate is a type of partnership agreement in which company members hold transferable shares while the company's goods are held in the partners' names.

Accepted Answer

A syndicate is a group of individuals or organizations that come together to finance a particular project or business venture. It is not a partnership agreement in which members hold transferable shares. The statement in the question is incorrect.

Question 6

A limited partnership is usually not affected by the death of a limited partner.

Accepted Answer

A limited partnership is structured in a way where the general partner(s) manage the business and have unlimited liability, while the limited partner(s) are passive investors who have limited liability. If a limited partner were to die, the partnership agreement would dictate the next steps, such as the transfer of the limited partner's ownership interest to their designated beneficiary or a buyout by the remaining partner(s). However, the partnership itself should be able to continue operating without being affected by the death of a limited partner.

Question 7

Which of the following statements is false regarding a sole proprietorship?
A)A sole proprietorship requires few legal formalities.
B)A sole proprietor has complete control of the management of the business.
C)The sole proprietor keeps all the profits from the business.
D)A sole proprietor is not personally liable for obligations of the business.
E)Profits are taxed as the personal income of the sole proprietor.

Accepted Answer

A)A sole proprietor is personally liable for any losses or obligations associated with
the business.
B)A sole proprietor is personally liable for any losses or obligations associated with the business.
C)A sole proprietor is personally liable for any losses or obligations associated with the business.
D)A sole proprietor is personally liable for any losses or obligations associated with the business.
E)A sole proprietor is personally liable for any losses or obligations associated with the business.

Question 8

A limited partnership consists of limited partners,but not general partners.

Accepted Answer

A limited partnership consists of both limited partners and general partners. Limited partners have limited liability and contribute only capital to the business, while general partners have unlimited liability and manage the day-to-day operations of the business.

Question 9

A partnership in which the partners share management responsibilities equally,but some partners are limited in regards to the amount of profit distribution to which they are entitled is an example of a limited partnership.

Accepted Answer

A partnership where partners share management responsibilities equally but have differing levels of profit distribution is not a limited partnership. In a limited partnership, there are general partners who manage the business and limited partners who invest but do not have management authority.

Question 10

Shareholders elect the members of the board of directors of a corporation.

Accepted Answer

Shareholders have the right to elect the board of directors of a corporation, typically at an annual meeting. This is considered a fundamental aspect of shareholder rights and corporate governance.

Question 11

An S corporation cannot have more than 75 shareholders.

Accepted Answer

An S corporation is limited to 100 shareholders, not 75.

Question 12

A franchisee is the owner of a trade name or trademark who is a party to an arrangement,whereby another party sells goods or services under the trade name or trademark.

Accepted Answer

In a partnership, both partners are liable for the debts and obligations of the business, including damages caused during the course of business operations. Therefore, the cost for the damaged door would typically be a business expense, not solely Leo's personal responsibility.

Question 13

A limited liability company is incorporated in the state in which it does business.

Accepted Answer

The answer of A limited liability company is incorporated in...

Question 14

What is the most popular form of business ownership in the U.S.?
A)Limited liability company
B)Limited liability partnership
C)Sole proprietorship
D)Limited partnership
E)Corporation

Accepted Answer

A)Sole proprietorships are by far the most popular form of business organization in
the United States.
B)Sole proprietorships are by far the most popular form of business organization in the United States.
C)Sole proprietorships are by far the most popular form of business organization in the United States.
D)Sole proprietorships are by far the most popular form of business organization in the United States.
E)Sole proprietorships are by far the most popular form of business organization in the United States.

Question 15

Cooperatives must be incorporated.

Accepted Answer

Cooperatives may be incorporated or unincorporated.Unincorporated cooperatives are treated like partnerships,meaning that the members share joint liability for the cooperative's actions.Members of incorporated cooperatives,on the other hand,enjoy limited liability just as do the shareholders of a corporation.

Question 16

Shareholders hire the officers of a corporation.

Accepted Answer

In a partnership, there are no shareholders to hire officers. Partnerships are typically managed by the partners themselves, not by officers who are hired by shareholders as in a corporation.

Question 17

When one of the members dies,a joint venture is not automatically terminated.

Accepted Answer

When one of the members dies, a joint venture is not automatically terminated. The surviving members may continue the venture or may choose to terminate it according to the terms of the agreement.

Question 18

An LLC is considered a citizen of every state in which its members reside for purposes of jurisdiction.

Accepted Answer

The answer of An LLC is considered a citizen of...

Question 19

Which of the following is a voluntary association between two or more persons who co-own a business for a profit?
A)Partnership
B)Joint entity
C)Joint proprietorship
D)Joint corporation
E)Co-owned business

Accepted Answer

A)A partnership is a voluntary association between two or more persons who
co-own a business for profit.
B)A partnership is a voluntary association between two or more persons who co-own a business for profit.
C)A partnership is a voluntary association between two or more persons who co-own a business for profit.
D)A partnership is a voluntary association between two or more persons who co-own a business for profit.
E)A partnership is a voluntary association between two or more persons who co-own a business for profit.

Question 20

A limited partnership and a limited liability partnership refer to the same type of business organization.

Accepted Answer

A limited partnership (LP) is a type of partnership where there are one or more general partners who manage the business and have unlimited liability, and one or more limited partners who invest in the business but have limited liability. In contrast, a limited liability partnership (LLP) is a type of partnership where all partners have limited liability, similar to shareholders in a corporation.

Quiz 35: Forms of Business Organization

In Japan,which of the following statements is false regarding limited liability partnerships?