Ch31 Introduction to Business Organization

Question 1

The most significant disadvantage of the sole proprietorship form of business is this. (Two words)

Answer 1

Unlimited Liability

Question 2

The sole proprietorship form of business has how many major advantages?

Answer 2

Two

Question 3

This is acronym for the form that is on page 374. This allows the entity to have its own number.

Answer 3

EIN

Question 4

This is a voluntary association of two or more people who have combined their money, property, or labor and skill, or a combination of these…for the purpose of some lawful business.

Answer 4

Partnership

Question 5

This type of partner is usually unknown to the public as a partner and usually takes no part in management.

Answer 5

Dormant

Question 6

This resembles a partnership, but shares of stock, as in a corporation, indicate ownership.

Answer 6

Joint Stock Company

Question 7

The ownership of these shares may be ______________ without dissolving the association.

Answer 7

Transferred

Question 8

Unlimited personal liability, instability, and disharmony are some of these in a partnership.

Answer 8

Disadvantages

Question 9

This partnership is when two or more people voluntarily contract to pool their capital and skill to conduct a business.

Answer 9

Ordinary

Question 10

This word is about the consent of all members in written form to end the LLC.

Answer 10

Dissolution

Question 11

This type of partner is active who attempts to conceal the fact from the public.

Answer 11

Secret

Question 12

This acronym is a form of business that allows the flexibility of being taxed as a partnership, corporation, or sole proprietor. It also deflects personal liability.

Answer 12

LLC

Question 13

Labor, skills, money are just a few of these of having a partnership.

Answer 13

Advantages

Question 14

This is the owner of a sole proprietorship.

Answer 14

Proprietor

Question 15

This describes the rights and duties of members and managers under an LLC.

Answer 15

Operating Agreement

Question 16

Cengage Learning: Association of people created by law into an entity.

Answer 16

Corporation

Question 17

Cengage Learning: Partner unknown to public with no part in management.

Answer 17

Dormant or Sleeping Partner

Question 18

Cengage Learning: Law requiring operator of business under assumed name to register with state.

Answer 18

Fictitious Name Registration Statutes

Question 19

Cengage Learning: Partner actively and openly engaged in business.

Answer 19

General Partner

Question 20

Cengage Learning: Business relationship similar to partnership, except existing for single transaction only.

Answer 20

Joint Venture

Question 21

Cengage Learning: Entity that issues shares of stock, but investors have unlimited liability

Answer 21

Joint-Stock Company

Question 22

Cengage Learning: Capital contribution is maximum loss.

Answer 22

Limited Liability

Question 23

Cengage Learning: Partnership–type organization but with limited liability.

Answer 23

Limited Liability Company

Question 24

Cengage Learning: Registered partnership whose members run business but have limited liability.

Answer 24

Limited Liability Partnership

Question 25

Cengage Learning: Partner who takes no active part in management and whom the public knows as a partner.

Answer 25

Limited Partner

Question 26

Cengage Learning: Partnership with partner whose liability is limited to capital contribution.

Answer 26

Limited Partnership

Question 27

Cengage Learning: Person who pretends to be a partner

Answer 27

Nominal Partner

Question 28

Cengage Learning: One devoted to professional services

Answer 28

Nontrading Partnership

Question 29

Cengage Learning: Partnership with no limitation on rights and duties of partners.

Answer 29

Ordinary or General Partnership

Question 30

Cengage Learning: Member of a partnership

Answer 30

Partners

Question 31

Cengage Learning: Association of two or more people to carry on business for profit.

Answer 31

Partnership

Question 32

Cengage Learning: Ignoring the corporate entity

Answer 32

Piercing the Corporate Veil

Question 33

Cengage Learning: Owner of sole proprietorship

Answer 33

Proprietor

Question 34

Cengage Learning: Partner active but unknown to public.

Answer 34

Secret Partner

Question 35

Cengage Learning: Partner who takes no part in firm.

Answer 35

Silent Partner

Question 36

Cengage Learning: Business owned and carried on by one person.

Answer 36

Sole Proprietorship

Question 37

Cengage Learning: One engaged in buying and selling.

Answer 37

Trading Partnership

Question 38

Cengage Learning: Business debts payable from personal assets.

Answer 38

Unlimited Liability

Question 39

1. A sole proprietorship has one owner but can have one or more employees.

Answer 39

True

Question 40

2. The partnership is the simplest and most common form of business.

Answer 40

False

Question 41

3. By definition, a partnership must be comprised of at least four people.

Answer 41

False

Question 42

4. An ordinary partnership has no limitation on the rights and duties of the partners.

Answer 42

True

Question 43

5. A minor may not be a partner.

Answer 43

False

Question 44

6. A corporation may be created by an informal agreement by private individuals.

Answer 44

False

Question 45

7. A corporation can sue and be sued.

Answer 45

True

Question 46

8. A partnership in which at least one partner's liability is fixed at the amount of the capital contribution is called a/n ________ partnership.

Answer 46

Limited

Question 47

9. A business organization similar to the partnership but without the disadvantage of unlimited liability is called a ________.

Answer 47

Limited Liability Company

Question 48

10. A partnership devoted to professional services is called a ________.

Answer 48

Nontrading Partnership

Question 49

11. A partner who takes no part in the firm is called a ________ partner.

Answer 49

Silent

Question 50

12. A business relationship in which two or more people combine their labor or property for a single undertaking is called a ________.

Answer 50

Joint Venture

Question 51

13. An association of people created by law into a separate legal entity is called a ________.

Answer 51

Corporation

Question 52

14. Courts will sometimes ignore the corporate entity protection.

Answer 52

Piercing the corporate veil