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1
A(n) _____ is a form of ownership that can have up to 75 shareholders, has limited liability, and is taxed as a partnership.
A)S corporation
B)limited liability company
C)sole proprietorship
D)cooperative
E)joint venture
2
Which of the following statements is true of sole proprietorships?
A)It is owned by more than one individual.
B)It employs fewer than 50 people.
C)It has a complex management structure.
D)It is expensive to organize.
E)It has varied sources of funds.
3
A disadvantage of sole proprietorships is that it:
A)cannot be closed easily.
B)requires profits to be distributed to all partners.
C)lacks business continuity.
D)needs financial reports to be disclosed to public.
E)is governed by stringent government regulations.
4
Which of the following statements is true of general partners?
A)They have limited liability.
B)They do not accept the risk of loss.
C)They participate in the management of a business.
D)They receive a small share of profits after limited partners.
E)They accept loss only up to their initial investment.
5
Which of the following is true of the types of partnership?
A)A general partnership has at least one general partner whose liability is limited to his or her investment in the business.
B)In limited partnership, the limited partners accept the risk of loss and the general partners' losses are limited to their initial investment.
C)A limited partnership involves a complete sharing in the management of a business.
D)In a limited partnership, the limited partner receives a larger share of the profits after the general partners have received their initial investment back.
E)A limited partnership has at least one general partner who assumes unlimited liability.
6
Which of the following forms of organizations is owned by just one or a few people who are closely involved in managing the business?
A)A limited liability company
B)A cooperative
C)An S corporation
D)A private corporation
E)A sole proprietorship
7
If a private corporation needs more money to expand or when its major owner dies and the heirs have large estate taxes to pay, the corporation typically sells its shares in a(n):
A)initial public offering.
B)equity carve-out.
C)reverse takeover.
D)leveraged capitalization.
E)squeeze-out.
8
A(n) _____ is owned and operated by the federal, state, or local government and focuses on providing service to citizens rather than earning profits.
A)nonprofit corporation
B)quasi-public corporation
C)S corporation
D)limited liability company
E)C corporation
9
When a corporation decides to sell new shares of common stock in the market, common stockholders are entitled to first purchase of the new stock through:
A)the proxy precedence.
B)the articles of partnership.
C)the preemptive right.
D)initial public offering.
E)leveraged buyouts.
10
In order to discourage hostile takeovers, a threatened company can allow its stockholders to buy stock at prices lower than the current market price by instituting a:
A)shark repellent.
B)white knight.
C)lawsuit.
D)poison pill.
E)leveraged buyout.





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