Question 1

Which of the following is normally considered a major disadvantage of the corporate form of business?

Accepted Answer

A)  difficult transfer of ownership.
B)  unlimited liability of owners.
C)  limited life.
D)  double taxation of earnings.E) A) and D)
F) A) and B)

Question 2

Many franchisors have rules that prohibit franchisees from sponsoring their own websites.

Accepted Answer

A) True 
 B)False

Question 3

Jamie and Maria invested all their savings in a small pizzeria they opened outside the University of Western Ontario.They operated the business as a general partnership.After 11 months the business went broke and Jamie and Maria were left with outstanding bills of $37,500,which is more than their investment in the company.Jamie and Maria can:

Accepted Answer

A)  lose only the funds they originally invested in their company.
B)  lose their personal assets as the result of their company's financial problems.
C)  lose only the total value of the assets actually used to operate the business.
D)  avoid any liability for these debts since a partnership is considered to be a business entity that is separate and distinct from the partners who own it.E) A) and D)
F) C) and D)

Question 4

Global franchising is unlikely to experience major growth due to convenience and predictable levels of service.

Accepted Answer

A) True 
 B)False

Question 5

A disadvantage of corporations is that an owner must get the approval of all other owners before selling his or her interest in the firm to another investor.

Accepted Answer

A) True 
 B)False

Question 6

One of the major advantages of a franchise system is the franchisee often gets instant recognition from consumers.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements about the operation of a corporation is correct?

Accepted Answer

A)  A corporate charter automatically expires in 99 years and must be renewed if the corporation wants to remain in business.
B)  Owners of a corporation have unlimited liability for any claims against their company.
C)  A corporation tends to be much easier to set up than a sole proprietorship or partnership.
D)  A corporation receives its charter from the federal or a provincial government.E) A) and D)
F) All of the above

Question 8

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

Accepted Answer

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

Question 9

When one of the owners of a corporation dies,the corporation legally ceases to exist.

Accepted Answer

A) True 
 B)False

Question 10

Few brick-and-mortar franchisees are expanding online.

Accepted Answer

A) True 
 B)False

Question 11

Stockholders in a corporation have limited liability for the debts of the corporation.

Accepted Answer

A) True 
 B)False

Question 12

Starting a new business as a sole proprietorship:

Accepted Answer

A)  requires retaining the services of an attorney.
B)  is usually simpler and less expensive than starting other forms of ownership.
C)  is simple,but the proprietorship fee is very expensive in some provinces.
D)  is very similar to starting a business as a corporation.E) B) and C)
F) All of the above

Question 13

Owners/shareholders in a public corporation have no control over the daily operations.

Accepted Answer

A) True 
 B)False

Question 14

Midas Muffler sells its business name and the rights to its products to prospective business persons who want to use the Midas name and offer Midas products.In this arrangement,Midas would be the __________,and the buyer of these rights is the ____________.

Accepted Answer

A)  owner;limited partner
B)  wholesaler;retailer
C)  co-signer;co-signee
D)  franchisor;franchiseeE) B) and D)
F) None of the above

Question 15

A major advantage of sole proprietorships is that an owner has limited liability for the debts of his or her business.

Accepted Answer

A) True 
 B)False

Question 16

All public corporations must file annual reports.

Accepted Answer

A) True 
 B)False

Question 17

A comparison of the three major forms of business ownership shows that sole proprietorships are usually the most difficult type of business to establish.

Accepted Answer

A) True 
 B)False

Question 18

Once a business is established,it's almost impossible to change from one form of business ownership to another.

Accepted Answer

A) True 
 B)False

Question 19

A __________is a federally or provincially chartered legal entity with authority to act and to have liability separate from its owners.

Accepted Answer

A)  non-profit organization
B)  limited partnership
C)  general partnership
D)  corporationE) None of the above
F) A) and B)

Question 20

The most popular international target for Canadian-based franchises is:

Accepted Answer

A)  The United States
B)  China
C)  India
D)  The European Common MarketE) B) and C)
F) All of the above

Exam 6: Forms of Business Ownership

When one of the owners of a corporation dies,the corporation legally ceases to exist.

Correct Answer
verified

Many franchisors have rules that prohibit franchisees from sponsoring their own websites.

Correct Answer
verified

Midas Muffler sells its business name and the rights to its products to prospective business persons who want to use the Midas name and offer Midas products.In this arrangement,Midas would be the ,and the buyer of these rights is the __.

Correct Answer
verified

A __________is a federally or provincially chartered legal entity with authority to act and to have liability separate from its owners.

Correct Answer
verified

Once a business is established,it's almost impossible to change from one form of business ownership to another.

Correct Answer
verified

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

Correct Answer
verified

The most popular international target for Canadian-based franchises is:

Correct Answer
verified

Few brick-and-mortar franchisees are expanding online.

Correct Answer
verified

One of the major advantages of a franchise system is the franchisee often gets instant recognition from consumers.

Correct Answer
verified

Correct Answer
verified

Starting a new business as a sole proprietorship:

Correct Answer
verified

Global franchising is unlikely to experience major growth due to convenience and predictable levels of service.

Correct Answer
verified

Owners/shareholders in a public corporation have no control over the daily operations.

Correct Answer
verified

A major advantage of sole proprietorships is that an owner has limited liability for the debts of his or her business.

Correct Answer
verified

All public corporations must file annual reports.

Correct Answer
verified

A comparison of the three major forms of business ownership shows that sole proprietorships are usually the most difficult type of business to establish.

Correct Answer
verified

Stockholders in a corporation have limited liability for the debts of the corporation.

Correct Answer
verified

Which of the following statements about the operation of a corporation is correct?

Correct Answer
verified

Which of the following is normally considered a major disadvantage of the corporate form of business?

Correct Answer
verified

A disadvantage of corporations is that an owner must get the approval of all other owners before selling his or her interest in the firm to another investor.

Correct Answer
verified

Exam 6: Forms of Business Ownership

When one of the owners of a corporation dies,the corporation legally ceases to exist.

Correct AnswerverifiedShow Answer

Many franchisors have rules that prohibit franchisees from sponsoring their own websites.

Correct AnswerverifiedShow Answer

Midas Muffler sells its business name and the rights to its products to prospective business persons who want to use the Midas name and offer Midas products.In this arrangement,Midas would be the __________,and the buyer of these rights is the ____________.

Correct AnswerverifiedShow Answer

A __________is a federally or provincially chartered legal entity with authority to act and to have liability separate from its owners.

Correct AnswerverifiedShow Answer

Once a business is established,it's almost impossible to change from one form of business ownership to another.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The most popular international target for Canadian-based franchises is:

Correct AnswerverifiedShow Answer

Few brick-and-mortar franchisees are expanding online.

Correct AnswerverifiedShow Answer

One of the major advantages of a franchise system is the franchisee often gets instant recognition from consumers.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Starting a new business as a sole proprietorship:

Correct AnswerverifiedShow Answer

Global franchising is unlikely to experience major growth due to convenience and predictable levels of service.

Correct AnswerverifiedShow Answer

Owners/shareholders in a public corporation have no control over the daily operations.

Correct AnswerverifiedShow Answer

A major advantage of sole proprietorships is that an owner has limited liability for the debts of his or her business.

Correct AnswerverifiedShow Answer

All public corporations must file annual reports.

Correct AnswerverifiedShow Answer

A comparison of the three major forms of business ownership shows that sole proprietorships are usually the most difficult type of business to establish.

Correct AnswerverifiedShow Answer

Stockholders in a corporation have limited liability for the debts of the corporation.

Correct AnswerverifiedShow Answer

Which of the following statements about the operation of a corporation is correct?

Correct AnswerverifiedShow Answer

Which of the following is normally considered a major disadvantage of the corporate form of business?

Correct AnswerverifiedShow Answer

A disadvantage of corporations is that an owner must get the approval of all other owners before selling his or her interest in the firm to another investor.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Midas Muffler sells its business name and the rights to its products to prospective business persons who want to use the Midas name and offer Midas products.In this arrangement,Midas would be the ,and the buyer of these rights is the __.

Correct Answer
verified

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