Question 1

Trudy wishes to buy a national franchise. What information is the seller legally required to provide before she buys the franchise?

Accepted Answer

The Federal Trade Commission requires th...

Question 2

Corporations have a distinct advantage over other forms of business organization in the area of taxation.

Accepted Answer

A) True 
 B)False

Question 3

A partnership is a taxable entity, separate from the partners.

Accepted Answer

A) True 
 B)False

Question 4

If partners wish to maintain having protection against personal liability, it is essential to comply with all the technicalities of a limited liability partnership statute.

Accepted Answer

A) True 
 B)False

Question 5

What federal agency requires that the seller of a franchise give the potential buyer a Franchise Disclosure Document (FDD) and audited financial statements?

Accepted Answer

A)  the Securities and Exchange Commission (SE
C)  
B)  the Interstate Commerce Commission (IC
C)  
C)  the Federal Trade Commission (FT
C)  
D)  the Franchise Sales Commission (FS
C)  E) A) and B)
F) A) and C)

Question 6

The term "S Corporation" comes from

Accepted Answer

A)  the Internal Revenue Code.
B)  the FTC rules.
C)  the Securities and Exchange Commission.
D)  state corporation law.E) A) and C)
F) B) and C)

Question 7

In many ways, a limited liability company can be thought of as a cross between

Accepted Answer

A)  a corporation and a franchise.
B)  a joint venture and a partnership.
C)  a corporation and a sole proprietorship.
D)  a sole proprietorship and a social enterprise.E) B) and D)
F) A) and D)

Question 8

All of the following are characteristics of a closely held corporation EXCEPT

Accepted Answer

A)  the shares are publicly traded.
B)  the corporation can typically operate without a board of directors.
C)  the shareholders usually restrict share transfer.
D)  minority shareholders are provided more protection than in regular corporations.E) A) and B)
F) A) and C)

Question 9

The form of business ownership that is the MOST easily transferable is the

Accepted Answer

A)  general partnership.
B)  corporation.
C)  close corporation.
D)  sole proprietorship.E) A) and B)
F) None of the above

Question 10

Charles and Ellen, an unmarried couple, run an ice cream store. The business is not incorporated, and they have filed no formation papers with the state. Their business is a

Accepted Answer

A)  sole proprietorship.
B)  partnership.
C)  franchise.
D)  limited liability company.E) A) and B)
F) A) and C)

Question 11

All the business forms listed below have limited liability EXCEPT the

Accepted Answer

A)  limited liability company.
B)  general partnership.
C)  "S" corporation.
D)  corporation.E) B) and D)
F) C) and D)

Question 12

Andy wants to start his own business. He has decided to rent space in a "strip mall" and open a pet shop. Additionally, he will provide dog grooming services. He figures he can do almost everything himself, though he will need to hire a part-time employee on an "as needed" basis. His friend, Lacy, has agreed to work when needed. 
Andy is considering operating his business as a sole proprietorship. What are the primary legal advantages and disadvantages to this form of business ownership for Andy's pet shop?

Accepted Answer

There are many advantages to operating t...

Question 13

Which of the following statements regarding social enterprises is TRUE?

Accepted Answer

A)  Social enterprises are essentially nonprofit organizations.
B)  To become a socially conscious organization, one-half of the shareholders must approve.
C)  The focus of social enterprises is the motto "reduce, reuse, recycle."
D)  A social enterprise must agree to measure its social benefit using objective third party standards.E) None of the above
F) A) and C)

Question 14

When a partner leaves the partnership, whether it be voluntary or by expulsion, death or bankruptcy, it is called

Accepted Answer

A)  dissociation.
B)  termination.
C)  detachment.
D)  separation.E) None of the above
F) B) and D)

Question 15

Compare and contrast the following forms of business organization as to ease of formation, liability of owners, management, and tax implications: sole proprietorship, general partnership, limited liability company, and corporation.

Accepted Answer

A sole proprietorship is an unincorporat...

Question 16

To be a close corporation, the business must be small, with no more than 20 owners, trade its stock publicly, and have no more than $500,000 in gross annual income.

Accepted Answer

A) True 
 B)False

Question 17

Jill owns a retail business by herself and was sued by a customer who fell in the store. The customer claimed the business was negligent in caring for its floors. Which statement best describes Jill's potential liability?

Accepted Answer

A)  Jill has no potential liability to the customer.
B)  Jill can be held personally liable to the customer since she is the owner.
C)  Jill can only be liable up to the amount she initially invested in the business.
D)  Jill cannot be held personally responsible; the woman's insurance must pay for the claim.E) A) and C)
F) None of the above

Exam 20: Starting a Business: Llcs and Other Options

If partners wish to maintain having protection against personal liability, it is essential to comply with all the technicalities of a limited liability partnership statute.

Correct Answer
verified

Charles and Ellen, an unmarried couple, run an ice cream store. The business is not incorporated, and they have filed no formation papers with the state. Their business is a

Correct Answer
verified

Which of the following statements regarding social enterprises is TRUE?

Correct Answer
verified

Correct Answer
verified
There are many advantages to operating t...
View Answer

All of the following are characteristics of a closely held corporation EXCEPT

Correct Answer
verified

To be a close corporation, the business must be small, with no more than 20 owners, trade its stock publicly, and have no more than $500,000 in gross annual income.

Correct Answer
verified

In many ways, a limited liability company can be thought of as a cross between

Correct Answer
verified

The form of business ownership that is the MOST easily transferable is the

Correct Answer
verified

Corporations have a distinct advantage over other forms of business organization in the area of taxation.

Correct Answer
verified

The term "S Corporation" comes from

Correct Answer
verified

What federal agency requires that the seller of a franchise give the potential buyer a Franchise Disclosure Document (FDD) and audited financial statements?

Correct Answer
verified

Jill owns a retail business by herself and was sued by a customer who fell in the store. The customer claimed the business was negligent in caring for its floors. Which statement best describes Jill's potential liability?

Correct Answer
verified

When a partner leaves the partnership, whether it be voluntary or by expulsion, death or bankruptcy, it is called

Correct Answer
verified

A partnership is a taxable entity, separate from the partners.

Correct Answer
verified

Trudy wishes to buy a national franchise. What information is the seller legally required to provide before she buys the franchise?

Correct Answer
verified
The Federal Trade Commission requires th...
View Answer

Compare and contrast the following forms of business organization as to ease of formation, liability of owners, management, and tax implications: sole proprietorship, general partnership, limited liability company, and corporation.

Correct Answer
verified
A sole proprietorship is an unincorporat...
View Answer

All the business forms listed below have limited liability EXCEPT the

Correct Answer
verified

Exam 20: Starting a Business: Llcs and Other Options

If partners wish to maintain having protection against personal liability, it is essential to comply with all the technicalities of a limited liability partnership statute.

Correct AnswerverifiedShow Answer

Charles and Ellen, an unmarried couple, run an ice cream store. The business is not incorporated, and they have filed no formation papers with the state. Their business is a

Correct AnswerverifiedShow Answer

Which of the following statements regarding social enterprises is TRUE?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThere are many advantages to operating t...View AnswerShow Answer

All of the following are characteristics of a closely held corporation EXCEPT

Correct AnswerverifiedShow Answer

To be a close corporation, the business must be small, with no more than 20 owners, trade its stock publicly, and have no more than $500,000 in gross annual income.

Correct AnswerverifiedShow Answer

In many ways, a limited liability company can be thought of as a cross between

Correct AnswerverifiedShow Answer

The form of business ownership that is the MOST easily transferable is the

Correct AnswerverifiedShow Answer

Corporations have a distinct advantage over other forms of business organization in the area of taxation.

Correct AnswerverifiedShow Answer

The term "S Corporation" comes from

Correct AnswerverifiedShow Answer

What federal agency requires that the seller of a franchise give the potential buyer a Franchise Disclosure Document (FDD) and audited financial statements?

Correct AnswerverifiedShow Answer

Jill owns a retail business by herself and was sued by a customer who fell in the store. The customer claimed the business was negligent in caring for its floors. Which statement best describes Jill's potential liability?

Correct AnswerverifiedShow Answer

When a partner leaves the partnership, whether it be voluntary or by expulsion, death or bankruptcy, it is called

Correct AnswerverifiedShow Answer

A partnership is a taxable entity, separate from the partners.

Correct AnswerverifiedShow Answer

Trudy wishes to buy a national franchise. What information is the seller legally required to provide before she buys the franchise?

Correct AnswerverifiedThe Federal Trade Commission requires th...View AnswerShow Answer

Compare and contrast the following forms of business organization as to ease of formation, liability of owners, management, and tax implications: sole proprietorship, general partnership, limited liability company, and corporation.

Correct AnswerverifiedA sole proprietorship is an unincorporat...View AnswerShow Answer

All the business forms listed below have limited liability EXCEPT the

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
There are many advantages to operating t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The Federal Trade Commission requires th...
View Answer

Correct Answer
verified
A sole proprietorship is an unincorporat...
View Answer

Correct Answer
verified