Question 1

One advantage of a partnership is that there is a simple process for partners to terminate their business.

Accepted Answer

A) True 
 B)False

Question 2

The owners of a limited liability company (LLC)must pay self-employment taxes on any profits they earn,even if they did not obtain a salary from the company.

Accepted Answer

A) True 
 B)False

Question 3

Jenna plans to invest in a cleaning service franchise called "Spare Time".At her first interview with the franchisor's selling agent,she learned that the parent company expects royalties of 5%.These are:

Accepted Answer

A)  The initial investment,also known as the franchise fee paid to the franchisor.
B)  The cost of supplies that she will purchase one time each month from the parent company.
C)  Milestones that the parent company expects her to reach.With each milestone,she will be rewarded with commissions.
D)  A share of the profits or a percentage share of revenues (net sales) .E) All of the above
F) A) and B)

Question 4

Most states have legal restrictions that prevent individuals from incorporating.

Accepted Answer

A) True 
 B)False

Question 5

The limited liability company requires a minimum of 10 members.

Accepted Answer

A) True 
 B)False

Question 6

It is impossible to run a franchise completely from home.

Accepted Answer

A) True 
 B)False

Question 7

Ted and Mark are partners in a dry cleaning business.They would like their brother Todd to join them.Unfortunately,partnership law states that only two partners can participate in a partnership.

Accepted Answer

A) True 
 B)False

Question 8

To change ownership in a corporation you simply sell your stock to someone else.

Accepted Answer

A) True 
 B)False

Question 9

A(n) _____________ is a company that has a proven business model and is willing to sell the rights to use the business model to others so that they can sell the same product or service within a given territory.

Accepted Answer

A)  intrapreneur
B)  franchisee
C)  limited partner
D)  franchisorE) A) and D)
F) A) and B)

Question 10

A conglomerate merger will:

Accepted Answer

A)  Diversify business operations and investments.
B)  Allow the firm to have a less dominant position in its market.
C)  Enable the firm to enjoy a higher degree of specialization.
D)  Give the firm a more secure access to needed materials and components and better control over quality.E) All of the above
F) B) and C)

Question 11

A merger involving a software producer and a clothing manufacturer is an example of a:

Accepted Answer

A)  Vertical merger.
B)  Horizontal merger.
C)  Linear merger.
D)  Conglomerate merger.E) None of the above
F) A) and D)

Question 12

Compared to sole proprietorships,an advantage of partnerships is their ability to obtain more financial resources.

Accepted Answer

A) True 
 B)False

Question 13

In a partnership,a(n) __________ partner (owner) actively manages the company and has unlimited liability for claims against the firm.

Accepted Answer

A)  unlimited
B)  limited
C)  general
D)  associateE) B) and D)
F) C) and D)

Question 14

One of the major disadvantages of a sole proprietorship is the:

Accepted Answer

A)  Possibility of disagreements between owners.
B)  Unlimited liability the owner has for the debts of the firm.
C)  Fact that any income earned by this type of business is taxed twice.
D)  High cost of starting or ending the company.E) C) and D)
F) A) and D)

Exam 5: How to Form a Business

It is impossible to run a franchise completely from home.

Correct Answer
verified

Ted and Mark are partners in a dry cleaning business.They would like their brother Todd to join them.Unfortunately,partnership law states that only two partners can participate in a partnership.

Correct Answer
verified

In a partnership,a(n) __________ partner (owner) actively manages the company and has unlimited liability for claims against the firm.

Correct Answer
verified

One of the major disadvantages of a sole proprietorship is the:

Correct Answer
verified

The limited liability company requires a minimum of 10 members.

Correct Answer
verified

Most states have legal restrictions that prevent individuals from incorporating.

Correct Answer
verified

The owners of a limited liability company (LLC)must pay self-employment taxes on any profits they earn,even if they did not obtain a salary from the company.

Correct Answer
verified

Compared to sole proprietorships,an advantage of partnerships is their ability to obtain more financial resources.

Correct Answer
verified

One advantage of a partnership is that there is a simple process for partners to terminate their business.

Correct Answer
verified

A(n) _____________ is a company that has a proven business model and is willing to sell the rights to use the business model to others so that they can sell the same product or service within a given territory.

Correct Answer
verified

A merger involving a software producer and a clothing manufacturer is an example of a:

Correct Answer
verified

Jenna plans to invest in a cleaning service franchise called "Spare Time".At her first interview with the franchisor's selling agent,she learned that the parent company expects royalties of 5%.These are:

Correct Answer
verified

To change ownership in a corporation you simply sell your stock to someone else.

Correct Answer
verified

A conglomerate merger will:

Correct Answer
verified

Exam 5: How to Form a Business

It is impossible to run a franchise completely from home.

Correct AnswerverifiedShow Answer

Ted and Mark are partners in a dry cleaning business.They would like their brother Todd to join them.Unfortunately,partnership law states that only two partners can participate in a partnership.

Correct AnswerverifiedShow Answer

In a partnership,a(n) __________ partner (owner) actively manages the company and has unlimited liability for claims against the firm.

Correct AnswerverifiedShow Answer

One of the major disadvantages of a sole proprietorship is the:

Correct AnswerverifiedShow Answer

The limited liability company requires a minimum of 10 members.

Correct AnswerverifiedShow Answer

Most states have legal restrictions that prevent individuals from incorporating.

Correct AnswerverifiedShow Answer

The owners of a limited liability company (LLC)must pay self-employment taxes on any profits they earn,even if they did not obtain a salary from the company.

Correct AnswerverifiedShow Answer

Compared to sole proprietorships,an advantage of partnerships is their ability to obtain more financial resources.

Correct AnswerverifiedShow Answer

One advantage of a partnership is that there is a simple process for partners to terminate their business.

Correct AnswerverifiedShow Answer

A(n) _____________ is a company that has a proven business model and is willing to sell the rights to use the business model to others so that they can sell the same product or service within a given territory.

Correct AnswerverifiedShow Answer

A merger involving a software producer and a clothing manufacturer is an example of a:

Correct AnswerverifiedShow Answer

Jenna plans to invest in a cleaning service franchise called "Spare Time".At her first interview with the franchisor's selling agent,she learned that the parent company expects royalties of 5%.These are:

Correct AnswerverifiedShow Answer

To change ownership in a corporation you simply sell your stock to someone else.

Correct AnswerverifiedShow Answer

A conglomerate merger will:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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verified

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verified

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verified

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verified

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verified

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verified

Correct Answer
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