Question 1

Which of the following is a true statement regarding Daria's statement that she had no personal liability?

Accepted Answer

A)  She was incorrect.
B)  She was correct.
C)  She was correct only if she can establish that she has at least 5 employees.
D)  She was incorrect unless she signed an agreement with a financial institution in order to get a loan for the business and agreed in the document that she would not accept personal liability for any losses.
E)  She was correct only if she can establish that she has paid all her business taxes on time.F) B) and C)
G) A) and B)

Question 2

Shareholders hire the officers of a corporation.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements is false regarding a limited partnership?

Accepted Answer

A)  The partnership must use the word "limited" in its title.
B)  If a limited partner dies,the limited partnership is usually unaffected.
C)  There must be at least one general partner.
D)  There must be at least two limited partners.
E)  The parties must file a certificate of partnership with a state office to create it.F) C) and E)
G) A) and E)

Question 4

Which of the following statements is true regarding joint ventures?

Accepted Answer

A)  Participants in a joint venture usually share profits equally,but share losses based on the percentage of contribution.
B)  Courts frequently apply sole proprietorship law to joint ventures.
C)  Participants in a joint venture usually share losses equally,but share profits based on the percentage of contribution.
D)  The joint venture is not automatically terminated when one of the members dies.
E)  A joint venture requires the filing of a formal agreement with the state.F) B) and D)
G) B) and E)

Question 5

Diego just finished a residence in internal medicine and wants to go into practice with Rowan and Desiree.Diego tells you that while he needs to practice with other physicians for call coverage and for other reasons,he does not want to be liable should the other physicians be found guilty of malpractice.You discuss various incorporation options with him,but he tells you that he would like to form a partnership.What business form would you recommend to him and why?

Accepted Answer

A limited liability partnershi...

Question 6

Which of the following is a business organization governed by a group of trustees who operate the trust for the beneficiaries?

Accepted Answer

A)  A business trust
B)  A syndicate
C)  An E corporation
D)  A joint enterprise
E)  An S corporationF) A) and B)
G) A) and C)

Question 7

Is Rashi correct that she was entitled to cancel all franchise agreements?

Accepted Answer

A)  No,while she was arguably justified in canceling Lola's franchise agreement,she was not justified in canceling other franchise agreements because no breach of the other franchise agreements had occurred.
B)  No,she could only cancel all franchises after a judgment was entered against her,and that had not yet occurred.
C)  Yes,because a personal service type of franchise was involved,she could cancel all the franchises at will.
D)  No,she was not entitled to cancel any franchise agreements.
E)  Yes,she can cancel the franchises but only if she can establish that her profits were less than had been expected.F) C) and E)
G) A) and B)

Question 8

[Cookie Problems] Rashi makes great chocolate chip cookies and sells them in her café called Rashi's Famous Cookies.Some of her friends have expressed interest in selling her cookies.They want to use her name and identify the cookies as Rashi's Famous Cookies.Seeing a business opportunity,Rashi agrees to bake the cookies and provide them frozen to her friends who will open other cafés under her café's name.Rashi strictly controls all packaging and sales.She also frequently inspects kitchens used by the sellers,pursuant to her agreements with them.Lola,one of Rashi's friends who entered into an agreement with Rashi to open a café and sell the cookies,was not being careful and negligently put a harmful ingredient into the cookie dough resulting in a customer,Jonah,becoming ill.Jonah threatens to sue both Lola and Rashi.Rashi is so exasperated that she cancels all the franchise contracts.Although the franchise agreements provide that,as long as requirements are met,the franchise agreements will continue for a period of two years,Rashi takes the position that the cookies involve a personal service using a trade secret,and that she cannot be held liable to her franchisees for discontinuation of the franchises.
-What type of arrangement did Rashi make with her friends?

Accepted Answer

A)  A franchise that was a manufacturing agreement.
B)  A joint venture.
C)  A joint partnership.
D)  A franchise that was a distributorship.
E)  A franchise that was a chain-style business operation.F) B) and E)
G) All of the above

Question 9

In Indiana,where R&R filed its certificate of authority,what term would be used to identify R&R's type of company?

Accepted Answer

A)  External business.
B)  Alien company.
C)  Out-of-state company
D)  Foreign company.
E)  Out-of-state operator.F) None of the above
G) All of the above

Question 10

A syndicate is a type of partnership agreement in which company members hold transferable shares while the company's goods are held in the partners' names.

Accepted Answer

A) True 
 B)False

Question 11

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 is known as an)  ________.

Accepted Answer

A)  Franchise
B)  Joint partnership
C)  Approved arrangement
D)  Consensual seller
E)  Joint ventureF) A) and C)
G) All of the above

Question 12

Which of the following statements is false regarding cooperatives?

Accepted Answer

A)  Unincorporated cooperatives are treated like partnerships.
B)  A cooperative is usually formed to market products.
C)  In unincorporated cooperatives,members share joint liability for the cooperative's actions.
D)  Members of incorporated cooperatives enjoy limited liability just as do the shareholders of a corporation.
E)  Cooperatives are usually formed as syndicates.F) A) and D)
G) B) and E)

Question 13

Which corporation can avoid double taxation,assuming all requirements are met?

Accepted Answer

A)  The S corporation.
B)  The D corporation.
C)  The F corporation.
D)  The C corporation.
E)  A corporation cannot avoid double taxation.F) B) and E)
G) A) and B)

Question 14

Which of the following is true regarding André's assertion regarding taxes?

Accepted Answer

A)  André is correct but only because his proposal does not involve a writing and the filing of paperwork with the secretary of their state.
B)  André is incorrect but only because the law involving taxation of corporations does not apply until there are at least 75 shareholders.
C)  André is correct insofar as the corporation would be required to pay taxes on its profits,and the shareholders would also be required to pay taxes on dividends.
D)  André is incorrect because all businesses are taxed in the same manner.
E)  André is incorrect but only because the law involving taxation of corporations does not apply until there are at least 10 shareholders.F) B) and E)
G) D) and E)

Question 15

A corporation can raise capital by issuing stock.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is true regarding André's and Sasha's quest to find the best form of business organization?

Accepted Answer

A)  A double sole proprietorship avoids corporate double taxation and also shields assets of the owners from tort claims of third parties although creditors may reach the personal assets of the owners.
B)  An unincorporated cooperative combines the tax advantages of a partnership with the limited liability of a corporation.
C)  A joint venture is a type of undertaking involving joint stock which is treated as a corporation in regard to double taxation and limited liability.
D)  A limited liability company combines the tax advantages of a partnership with the limited liability of a corporation.
E)  An S corporation provides the tax advantages of a partnership but does not avoid personal liability for shareholders.F) A) and B)
G) D) and E)

Question 17

Which of the following statements is true about cooperatives?

Accepted Answer

A)  Courts never treat cooperatives like a partnership.
B)  Like shareholders of a corporation,members of incorporated cooperatives enjoy limited liability.
C)  Cooperatives may be incorporated or unincorporated,however,in either case,liability for its members is the same.
D)  Unincorporated cooperatives are treated like limited liability companies.
E)  Cooperatives are not incorporated.F) D) and E)
G) A) and D)

Question 18

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.

Accepted Answer

A) True 
 B)False

Question 19

In which form of organization may investors share in profits but not in management responsibilities while avoiding personal liability?

Accepted Answer

A)  General partnership
B)  Limited liability partnership
C)  Limited partnership
D)  Limited liability company
E)  There is no such entityF) A) and C)
G) C) and D)

Question 20

What are the advantages and disadvantages of a sole proprietorship form of business.?

Accepted Answer

The advantages are that 1)creation is ea...

Exam 35: Forms of Business Organization

Which of the following statements is true regarding joint ventures?

Correct Answer
verified

A syndicate is a type of partnership agreement in which company members hold transferable shares while the company's goods are held in the partners' names.

Correct Answer
verified

Which of the following is true regarding André's assertion regarding taxes?

Correct Answer
verified

Correct Answer
verified
A limited liability partnershi...
View Answer

In which form of organization may investors share in profits but not in management responsibilities while avoiding personal liability?

Correct Answer
verified

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.

Correct Answer
verified

A corporation can raise capital by issuing stock.

Correct Answer
verified

Which of the following is true regarding André's and Sasha's quest to find the best form of business organization?

Correct Answer
verified

In Indiana,where R&R filed its certificate of authority,what term would be used to identify R&R's type of company?

Correct Answer
verified

Which of the following statements is false regarding cooperatives?

Correct Answer
verified

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 is known as an) ________.

Correct Answer
verified

Which corporation can avoid double taxation,assuming all requirements are met?

Correct Answer
verified

Shareholders hire the officers of a corporation.

Correct Answer
verified

Correct Answer
verified

Which of the following is a business organization governed by a group of trustees who operate the trust for the beneficiaries?

Correct Answer
verified

Is Rashi correct that she was entitled to cancel all franchise agreements?

Correct Answer
verified

Which of the following statements is false regarding a limited partnership?

Correct Answer
verified

Which of the following statements is true about cooperatives?

Correct Answer
verified

What are the advantages and disadvantages of a sole proprietorship form of business.?

Correct Answer
verified
The advantages are that 1)creation is ea...
View Answer

Which of the following is a true statement regarding Daria's statement that she had no personal liability?

Correct Answer
verified

Exam 35: Forms of Business Organization

Which of the following statements is true regarding joint ventures?

Correct AnswerverifiedShow Answer

A syndicate is a type of partnership agreement in which company members hold transferable shares while the company's goods are held in the partners' names.

Correct AnswerverifiedShow Answer

Which of the following is true regarding André's assertion regarding taxes?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA limited liability partnershi...View AnswerShow Answer

In which form of organization may investors share in profits but not in management responsibilities while avoiding personal liability?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

A corporation can raise capital by issuing stock.

Correct AnswerverifiedShow Answer

Which of the following is true regarding André's and Sasha's quest to find the best form of business organization?

Correct AnswerverifiedShow Answer

In Indiana,where R&R filed its certificate of authority,what term would be used to identify R&R's type of company?

Correct AnswerverifiedShow Answer

Which of the following statements is false regarding cooperatives?

Correct AnswerverifiedShow Answer

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 is known as an) ________.

Correct AnswerverifiedShow Answer

Which corporation can avoid double taxation,assuming all requirements are met?

Correct AnswerverifiedShow Answer

Shareholders hire the officers of a corporation.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is a business organization governed by a group of trustees who operate the trust for the beneficiaries?

Correct AnswerverifiedShow Answer

Is Rashi correct that she was entitled to cancel all franchise agreements?

Correct AnswerverifiedShow Answer

Which of the following statements is false regarding a limited partnership?

Correct AnswerverifiedShow Answer

Which of the following statements is true about cooperatives?

Correct AnswerverifiedShow Answer

What are the advantages and disadvantages of a sole proprietorship form of business.?

Correct AnswerverifiedThe advantages are that 1)creation is ea...View AnswerShow Answer

Which of the following is a true statement regarding Daria's statement that she had no personal liability?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified
A limited liability partnershi...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
The advantages are that 1)creation is ea...
View Answer

Correct Answer
verified