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Exam 6: Forms of Business Ownership

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Question 1

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To many business people,one of the major attractions of a sole proprietorship is:

A) the ability to obtain additional financial resources.
B) an unlimited lifespan.
C) the protection of limited liability.
D) the chance to be their own boss.

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Question 2

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One advantage of corporations is that the initial cost of setting them up is usually lower than for other forms of ownership.

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Question 3

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Franchisors give franchisees the right to use their name and product,but franchisees must obtain all financing advice and develop all marketing strategies on their own.

The form of business ownership that is best suited to raising large amounts of money for expansion is the:

The form of business ownership that usually requires the most detailed record keeping is the:

A distinguishing feature of a co-operative is that it:

One of the major disadvantages of a partnership is that profits must be divided according to very specific legal guidelines.

A general partner can take an active role in the management of the business.

Dev is an owner (partner) who has unlimited liability and is active in managing a law firm.Dev is an example of a:

Ana has always disliked the notion that the customers,managers,and workers of a business are separate individuals with competing goals.She has joined with many other people in her community who share this view to become a member,and part owner,of a child care centre.Ana and the other members operate the centre for their own benefit,and each is expected to work at the centre at least 12 hours each month.The type of organization Ana belongs to is known as a joint venture.

Franchised businesses in Canada account for 10% of all retail sales,and employ about 200,000 people.

Franchising is popular in Canada,but legal barriers have limited its popularity in foreign countries.

An advantage of forming a sole proprietorship is that it allows the owner to have more time for leisure activities.

Compared to partnerships and sole proprietorships,a major advantage of a public corporation as a form of business ownership is that it:

In a typical franchise agreement,the franchisor pays the franchisee a fee to manage its company,and the two of them split the profits based on the percentages established in the agreement.

A significant disadvantage of owning a sole proprietorship is the:

Which form of business ownership has no risks?

The is the most common form of business ownership.

Which of the following operations is not an example of a franchise?

Daggie's Sandwiches,Inc. ,sells the rights to use its name and sell its sandwiches in a given market area to aspiring business people who are willing to pay agreed upon fees and meet certain contractual terms.Daggie's: