Chapter 35 (ki) – Flashcards
Unlock all answers in this set
Unlock answersquestion
Which of the following is true about partnership?
answer
It is a voluntary association between two or more persons who co-own a business for profit.
question
Under which of the following forms of business organization do partners equally divide the profits and management responsibilities and share unlimited personal liability for the debts?
answer
General partnership
question
Which of the following is true of limited partnerships?
answer
Limited partners pay taxes on their share of the profit.
question
If the partners have created a _____, all the partners assume liability for one partner's professional malpractice, but only to the extent of the partnership's assets.
answer
limited liability partnership
question
Which of the following is considered a separate legal entity?
answer
Corporation
question
Which of the following should be formed to avoid double taxation?
answer
S corporation
question
Which of the following statements about limited liability company is true?
answer
It combines the tax advantages and management flexibility of a partnership with the limited liability of a corporation.
question
A cooperative:
answer
is an organization formed by individuals who usually pool their resources to gain an advantage in the market.
question
A _____ 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.
answer
joint stock company
question
A _____ is a relationship between two or more persons or corporations created for a specific business undertaking.
answer
joint venture
question
A _____ is an investment group that comes together for the explicit purpose of financing a specific large project.
answer
syndicate
question
Which of the following statements of joint venture is true?
answer
It is usually terminated when all the stock has been sold.
question
In a _____, the franchise operates under the franchisor's business name and is required to follow the franchisor's standards and methods of business operation.
answer
chain-style business operation
question
A car dealership is an example of a:
answer
distributorship.
question
Which among the following is not part of the franchise agreement?
answer
Price at which the franchisee sells the goods
question
A sole proprietor is considered a separate legal entity.
answer
False
question
A limited partnership is one 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.
answer
False
question
A limited partnership and a limited liability partnership refer to the same type of business organization.
answer
False
question
Members of the board of directors of a corporation are elected by shareholders.
answer
True
question
Officers of a corporation are hired by the shareholders.
answer
False
question
A regular corporation may only have up to 200 shareholders while an S corporation cannot have more than 75 shareholders.
answer
False
question
For purposes of jurisdiction, an LLC is considered a citizen of every state in which its members reside.
answer
True
question
Cooperatives must be incorporated.
answer
False
question
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.
answer
False
question
The joint venture is not automatically terminated when one of the members dies.
answer
True
question
A person who decides to go into business on his or her own without further formality forms a(n) ______.
answer
Sole proprietorship
question
Which of the following is false regarding a sole proprietorship?
answer
A sole proprietor is not personally liable for obligations of the business.
question
Which of the following is the most popular form of business ownership in the U.S.?
answer
Sole proprietorship
question
Which of the following is Germany's equivalent to the sole proprietorships?
answer
Sole traders
question
Which of the following is a voluntary association between two or more persons who co-own a business for a profit?
answer
Partnership
question
Which of the following governs partnerships in most states in the absence of an express agreement?
answer
The Uniform Partnership Act
question
Which of the following is false regarding a partnership?
answer
In most cases partners do not have personal liability for losses.
question
Which of the following is a type of partnership?
answer
Limited partnerships General partnerships Limited liability partnerships
question
In which of the following may investors share in profits but do not share in management responsibilities and do not incur personal liability?
answer
Limited partnership
question
Which of the following is not generally terminated on the death of the owner or partner?
answer
Limited partnerships
question
Which of the following is distinguishable from other forms of partnerships because the partners' liability for professional malpractice is limited to the partnership?
answer
Limited liability partnership
question
Which of the following is false regarding a limited partnership?
answer
There must be at least two limited partners.
question
Investor-owners of a corporation are called which of the following?
answer
Shareholders
question
Which of the following is responsible for managing the business of a corporation?
answer
Members of the board of directors
question
Which of the following is responsible for running the day-to-day business of a corporation?
answer
Officers
question
Which of the following is true regarding corporations?
answer
The corporation must pay taxes on profits, and shareholders must pay taxes on dividends they receive from the corporation.
question
Which of the following is a way that a corporation can avoid double taxation?
answer
By forming an S corporation.
question
Which of the following is true regarding S corporations?
answer
They are often formed under federal law.
question
Which of the following offers tax advantages of a partnership and liability advantages similar to a corporation, but allows for unlimited shareholders?
answer
A limited liability company
question
Which of the following is false regarding limited liability companies?
answer
Owners of an LLC are referred to as incorporators.
question
Which of the following generally has unlimited transferability of ownership interests?
answer
A corporation and a limited liability company, but not a general partnership.
question
The Mexican limited liability company is derived from the model in which of the following countries?
answer
Germany
question
Which of the following is an organization formed by individuals, who usually pool their resources, to market products?
answer
A cooperative
question
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?
answer
A joint stock company
question
Which of the following is a business organization governed by a group of trustees who operate the trust for the beneficiaries?
answer
A business trust
question
Which of the following is a group that comes together for the explicit purpose of financing a specific large project?
answer
A syndicate
question
Which of the following is a relationship between two or more persons or corporations created for a specific business undertaking?
answer
A joint venture
question
Which of the following is true regarding joint ventures?
answer
The joint venture is not automatically terminated when one of the members dies.
question
Which of the following is a business that exists because of an arrangement between the owner of a trade name or trademark and a person who sells goods or services under the trade name or trademark?
answer
Franchise
question
In which of the following does the franchise operate under the franchisor's business name and act subject to the franchisor's standards and methods of business operation?
answer
Chain-style business operation
question
Which of the following are franchises in which the franchisor manufactures a product and licenses a dealer to sell the product in an exclusive territory?
answer
Distributorship
question
In which of the following does the franchisor provide the franchisee with the formula or necessary ingredient to manufacture a product?
answer
Manufacturing arrangement
question
Which of the following is false regarding franchises?
answer
The UCC does not apply in the realm of disputes between franchisors and franchisees.
question
Which of the following establishes how a franchise agreement will be terminated?
answer
The franchise agreement
question
Which of the following may be created without a written document and without filing anything with the state?
answer
A general partnership
question
Which of the following would likely be formed by farmers who want to pool certain crops together to ensure that they get a high market price for their crops?
answer
A cooperative
question
Which of the following is false regarding cooperatives?
answer
Cooperatives are usually formed as syndicates.
