When can a sole proprietorship legally be dissolved?
Q1. Suppose BrightLights Online Video purchases another company, QuikFlix. What is this an example of?
a. merger b. spin-off c. divestiture d. acquisition e. collapse
Q2. The board of directors of a corporation reports to the officers of the corporation.
a. True b. False
Q3. What is the name of the document in which an entrepreneur summarizes his or her business strategy for a proposed new venture?
a. success chart b. director's guideline c. financial blueprint d. business plan e. balance sheet
Q4. Lucy has organized her craft shop as a sole proprietorship. Her sister has warned Lucy about the legal principle holding her responsible for paying off all of the debts of the business. What is the name of this principle?
a. unlimited liability b. limited liability c. privity d. unrestricted debt e. accountability
Q5. Franchisees may be obligated to contribute a percentage of sales to parent corporations.
a. True b. False
Q6. What is the most important advantage of general partnerships?
a. the unlimited liability of the partnership b. the ability to grow with the addition of new talent and money c. the ease of implementing an effective control system d. the increased role of luck e. the need for minority partners
Q7. Kent and Patrick have decided to start a landscaping business. One of the first things that they do is sign a document that describes the investments and responsibilities of the partners and makes provisions for the allocation of profits and dissolution of the business. What is the name of this document?
a. articles of incorporation b. partnership charter c. partnership agreement d. corporate charter e. financial proposal
Q8. What is the most effective way for an entrepreneur to become a competent manager?
a. working alone b. relying on luck c. getting a college degree d. being open to opportunities e. working for a successful company first
Q9. When can a sole proprietorship legally be dissolved?
a. sales exceed $1 million b. the partners reorganize the firm's structure c. earnings are less than $500,000 d. the owner donates profits e. the owner dies
Q10. Which type of business is legally considered a separate entity from its owners and is liable for its own debts?
a. sole proprietorship b. corporation c. limited partnership d. cooperative e. general partnership
