Business and Personal Finance © 2007

Chapter 16: Types of Business Ownership

Practice Tests

1
A _______ is a business partner who does not take an active role in decision making or running the business.
A)general partner
B)limited partner
C)sole proprietor
D)stockholder
2
A _______ is a business partner who has decision-making authority, takes an active role in the operation of a business, and has unlimited liability for all losses or debts of the partnership.
A)limited partner
B)general partner
C)business owner
D)sole proprietor
3
Limited human resources is a disadvantage of a _______.
A)partnership
B)closely held corporation
C)publicly held corporation
D)sole proprietorship
4
_______ account for 5 percent of all the businesses in the United States.
A)partnerships
B)sole proprietorships
C)closely held corporations
D)publicly held corporations
5
An advantage of organizing a business as a partnership is _______.
A)disagreement among partners
B)unlimited liability
C)more skills and knowledge
D)limited life
6
A _______ is a business organization that operates as a legal entity that is separate from its owners and is treated by law as if it were an individual person.
A)sole proprietorship
B)partnership
C)corporation
D)board of directors
7
_______ refers to an application to operate as a corporation.
A)corporate bylaws
B)corporate charter
C)going public
D)articles of incorporation
8
_______ is a disadvantage of organizing a business as a corporation.
A)double taxation
B)lack of capital
C)limited liability
D)snap decision making
9
Many small and family-owned businesses operate as _______.
A)franchises
B)limited liability companies
C)publicly held corporations
D)closely held corporations
10
A _______ is a business that operates and pays taxes as a partnership but has limited liability for the owners.
A)limited liability company (LLC)
B)closely held corporation
C)publicly held corporation
D)franchise
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