Business Principles: Chapter 4 – Flashcards
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True
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Compared to other forms of business ownership, sole proprietorships have the greatest degree of secrecy.
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True
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Sole proprietorships typically employ less than 50 people.
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It is easy and inexpensive to form.
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Which of the following is an advantage of a sole proprietorship?
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Ease of dissolving the business
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Which of the following is an advantage of a sole proprietorship?
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A partnership
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According to the U.S. Bureau of the Census, which form of business ownership is the least used in the U.S.?
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taxed as personal income
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The income earned in sole proprietorship is:
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Lack of continuity
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Which of the following is a disadvantage of sole proprietorship?
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Taxation
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Which characteristic of a sole proprietorship can be considered both an advantage and a disadvantage?
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When a project is risky and the chance of loss is great
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When are limited partnerships generally used?
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articles of partnership
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The legal documents that identify the basic agreements between partners are called:
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there are two partners and both of them are involved in the day-to-day activities of the business
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The decision-making process in a partnership tends to be faster when:
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Fewer regulatory controls than in a corporation
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Which of the following is not a disadvantage of forming a partnership?
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Lack of regulatory control
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Which of the following is an advantage of a partnership?
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They pay taxes at the income tax rate for individuals
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Which of the following statements is true of taxation in partnership?
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Dividends
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___ are profits of a corporation that are distributed in the form of cash payments to stockholders.
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Corporate charter
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__ is a legal document that the state issues to a company based on information the company provides in the articles of incorporation.
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foreign
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A corporation doing business outside the state in which it is chartered is known as a(n) ___ corporation.
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whose stock is not traded in public markets
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A private corporation is one:
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a nonprofit corporation
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Which of the following is a corporation that provides a service, but does not focus on earning profits, nor is it owned by the government?
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board of directors
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A(n) __ is elected by the stockholders of a corporation to oversee its general operation and set long-term objectives.
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they have a claim to profits before other stockholders do
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Which of the following statements is true of preferred stockholders?
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proxy
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A written authorization that assigns a stockholder's voting privilege to another is called a:
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It is popular in situations that call for large investments
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Which of the following statements is true of joint ventures?
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An S corporation
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Which of the following forms of business organizations restricts the number and types of shareholders and is difficult to form and operate?
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a limited liability company
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Which of the following forms of business ownership provides limited liability, but is taxed like a partnership?
