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Patterns of Entrepreneurship Management

Test Bank For Patterns of Entrepreneurship Management 4th Edition by Kaplan

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Test Bank For Patterns of Entrepreneurship Management 4th Edition by Kaplan

Chapter 6: Setting up the Company

True/False

Unfortunately, with the way the laws are written, the sole owner does not have the right to make all the decisions for the business.
Ans: False Page: 133

One of the most attractive features of sole proprietorships is how fast and simple it is to begin operations.
Ans: True Page: 134

In choosing a form of ownership, entrepreneurs must remember that there is no single “best” form.
Ans: True Page: 134

The greatest advantage of a sole proprietorship is unlimited personal liability.
Ans: False Page: 135

When a corporation is founded, it does not have to accept the regulations and restrictions of the state in which it is incorporated and of each state in which it does business.
Ans: False Page: 136

When a corporation is established, its equity is divided among a number of shares of stock that are issued to the investors in proportion to their investment in the corporation.
Ans: True Page: 136

The board is selected by the CEO and she or he has the power to remove board members.
Ans: False Page: 136

The ownership of a corporation lies in the stockholders and is evidenced by stock certificates issued to the shareholder.
Ans: True Page: 139

The total number of issued shares outstanding in a company is most often shown in the annual report.
Ans: True Page: 140

A disadvantage of a limited liability company is that the owners do not assume liabilities for debt.
Ans: False Page: 146

 

Short Answer / Fill in the Blank

A(n) ________ is a form of business in which a single owner does business himself or herself and requires only a business license to open.
Ans: sole proprietorship Page: 133

The __________ is the most common form of business ownership.
Ans: C-corporation Page: 136

_________ value is an archaic concept that is still applied to stocks.
Ans: Par Page: 139

Annual _________ are usually based on the number of shares of authorized stock and on whether the stock has a par value.
Ans: taxes Page: 139

____________ are the stock that a company sells to investors to generate capital.
Ans: Issued shares Page: 140

The _____________ is a corporation that elects under federal and state tax laws to be taxed like a partnership.
Ans: S-corporation Page: 142

A(n) _________ is usually defined as an association of two or more people carrying on as co-owners of a business for profit.
Ans: partnership Page: 144

A(n) ________ partnership must have at least one general partner so at least one person or entity’s personal assets must be at stake.
Ans: limited Page: 144

A(n) ________ is a blend of some of the best characteristics of corporations, partnerships, and sole proprietorships.
Ans: limited liability company Page: 146

A limited liability company is formed by filing a(n) _______________ form with a secretary of state and signing an LLO Operating Agreement.
Ans: Article of Organization Page: 146

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