Question 1

What is the principal advantage of an S corporation over a C corporation?

Accepted Answer

An S corporation permits a business to r

Question 2

As it relates to new businesses, one function of a social network is to

Accepted Answer

A)  promote the enterprise during conversations with potential rivals. 
B)  provide a pool of candidates for leadership positions. 
C)  assure a steady flow of applicants for production positions. 
D)  connect the enterprise to a web of contacts that provides access to a wide range of resources. 
A)  promote the enterprise during conversations with potential rivals. 
B)  provide a pool of candidates for leadership positions. 
C)  assure a steady flow of applicants for production positions. 
D)  connect the enterprise to a web of contacts that provides access to a wide range of resources.

Question 3

Sometimes, small business board members are given company stock in lieu of compensation.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following legal forms allows owners to contribute no capital but still play a part in managing the business and share in its profits?

Accepted Answer

A)  S corporation 
B)  C corporation 
C)  Partnership 
D)  Sole proprietorship 
A)  S corporation 
B)  C corporation 
C)  Partnership 
D)  Sole proprietorship

Question 5

Match the term with its definition.
-A legal entity formed by two or more co-owners to operate a business for profit

Accepted Answer

A) advisory board 
B) B corporation 
C) C corporation 
D) corporate charter 
E) joint and several liability
F)partnership
G)professional corporation
H)S corporation (Subchapter S corporation)
I)unlimited liability 
A) advisory board 
B) B corporation 
C) C corporation 
D) corporate charter 
E) joint and several liability
F)partnership
G)professional corporation
H)S corporation (Subchapter S corporation)
I)unlimited liability

Question 6

A professional corporation shields owners from one another's liability and is set up for individuals in certain professional practices.

Accepted Answer

A) True 
 B)False

Question 7

Jay's Catering Company holds tasting events that work as a small business strategic alliance by promoting

Accepted Answer

A)  its combined technological expertise. 
B)  the various cultures in the community. 
C)  other complementary service providers. 
D)  the flexibility of this small company. 
A)  its combined technological expertise. 
B)  the various cultures in the community. 
C)  other complementary service providers. 
D)  the flexibility of this small company.

Question 8

An ownership interest does not confer a legal right to act for the firm or to share in its management.

Accepted Answer

A) True 
 B)False

Question 9

One benefit of an S corporation is that it allows shareholders to receive dividends without

Accepted Answer

A)  paying taxes. 
B)  penalties and interest. 
C)  double taxation. 
D)  partnership taxation. 
A)  paying taxes. 
B)  penalties and interest. 
C)  double taxation. 
D)  partnership taxation.

Question 10

Vicenzo is the sole owner and manager of a startup company. As the business grows, he finds it more difficult to fulfill the needs of all the management positions. Although he is the creative genius behind the company, he lacks experience in other areas. At this point, Vicenzo should

Accepted Answer

A)  seek the advice of an investment banker. 
B)  hire a management team with expertise in complementary areas. 
C)  encourage his advisors to take an active role in managing the company. 
D)  form an alliance with another startup company. 
A)  seek the advice of an investment banker. 
B)  hire a management team with expertise in complementary areas. 
C)  encourage his advisors to take an active role in managing the company. 
D)  form an alliance with another startup company.

Question 11

Collin's Classic for Children with Cancer is a 501(c)(3) nonprofit corporation that sells shirts. The organization will be taxed as a(n)

Accepted Answer

A)  partnership. 
B)  C corporation. 
C)  S corporation. 
D)  None of these are correct. 
A)  partnership. 
B)  C corporation. 
C)  S corporation. 
D)  None of these are correct.

Question 12

Robbie's financial advisor referred a customer to Robbie's new business. Under the concept of _____, Robbie is now obligated to return the favor.

Accepted Answer

A)  reciprocation 
B)  social capital 
C)  social networking 
D)  unlimited liability 
A)  reciprocation 
B)  social capital 
C)  social networking 
D)  unlimited liability

Question 13

Match the term with its definition.
-A business organization that is recognized by the law as having a separate legal existence

Accepted Answer

A) board of directors 
B) general partner 
C) legal entity 
D) limited liability company 
E) limited partners
F)nonprofit corporation
G)partnership agreement
H)sole proprietorship
I)social network 
A) board of directors 
B) general partner 
C) legal entity 
D) limited liability company 
E) limited partners
F)nonprofit corporation
G)partnership agreement
H)sole proprietorship
I)social network

Question 14

What are some suggestions you could offer someone for choosing a partner?

Accepted Answer

The formation of a partnership involves

Question 15

By utilizing the experience of a board of directors, the chief executive of a small corporation may have to relinquish active control of its operations.

Accepted Answer

A) True 
 B)False

Question 16

Explain the advantages of having outsiders as board members.

Accepted Answer

Because an outside board's income does n

Question 17

Unlimited liability for business debts is imposed on

Accepted Answer

A)  shareholders in a C corporation. 
B)  shareholders in an S corporation. 
C)  sole proprietors. 
D)  limited partners. 
A)  shareholders in a C corporation. 
B)  shareholders in an S corporation. 
C)  sole proprietors. 
D)  limited partners.

Question 18

Identify the three most basic forms of legal organization used by small businesses. What are the factors one must consider when choosing a legal form of organization?

Accepted Answer

The three most basic legal forms of orga

Question 19

To maintain status as a corporation, the corporation must

Accepted Answer

A)  reapply for a charter annually. 
B)  submit its bylaws to the secretary of the state of incorporation every year. 
C)  hold annual meetings of both the shareholders and the board of directors. 
D)  properly declare annual dividends. 
A)  reapply for a charter annually. 
B)  submit its bylaws to the secretary of the state of incorporation every year. 
C)  hold annual meetings of both the shareholders and the board of directors. 
D)  properly declare annual dividends.

Question 20

Which of the following forms of corporate structure is used by a company that equally concerns itself with making money and doing good in the world?

Accepted Answer

A)  Limited partnership 
B)  B corporation 
C)  Nonprofit corporation 
D)  S corporation 
A)  Limited partnership 
B)  B corporation 
C)  Nonprofit corporation 
D)  S corporation

Exam 8: The Organizational Plan: Teams, Legal Structures, Alliances, and Directors

What is the principal advantage of an S corporation over a C corporation?

As it relates to new businesses, one function of a social network is to

Sometimes, small business board members are given company stock in lieu of compensation.

Which of the following legal forms allows owners to contribute no capital but still play a part in managing the business and share in its profits?

Match the term with its definition. -A legal entity formed by two or more co-owners to operate a business for profit

A professional corporation shields owners from one another's liability and is set up for individuals in certain professional practices.

Jay's Catering Company holds tasting events that work as a small business strategic alliance by promoting

An ownership interest does not confer a legal right to act for the firm or to share in its management.

One benefit of an S corporation is that it allows shareholders to receive dividends without

Vicenzo is the sole owner and manager of a startup company. As the business grows, he finds it more difficult to fulfill the needs of all the management positions. Although he is the creative genius behind the company, he lacks experience in other areas. At this point, Vicenzo should

Collin's Classic for Children with Cancer is a 501(c)(3) nonprofit corporation that sells shirts. The organization will be taxed as a(n)

Robbie's financial advisor referred a customer to Robbie's new business. Under the concept of _____, Robbie is now obligated to return the favor.

Match the term with its definition. -A business organization that is recognized by the law as having a separate legal existence

What are some suggestions you could offer someone for choosing a partner?

By utilizing the experience of a board of directors, the chief executive of a small corporation may have to relinquish active control of its operations.

Explain the advantages of having outsiders as board members.

Unlimited liability for business debts is imposed on

Identify the three most basic forms of legal organization used by small businesses. What are the factors one must consider when choosing a legal form of organization?

To maintain status as a corporation, the corporation must

Which of the following forms of corporate structure is used by a company that equally concerns itself with making money and doing good in the world?

The Entrepreneurial Lifethe Entrepreneurial Life

Integrity, Ethics, and Social Entrepreneurship

Starting a Small Business

Franchises and Buyouts

The Family Business

The Business Plan: Visualizing the Dream

The Marketing Plan

The Location Plan

Understanding a Firms Financial Statements

Forecasting Financial Requirements

A Firms Sources of Financing

Planning for the Harvest

Building Customer Relationships

Product Development and Supply Chain Management

Pricing and Credit Decisions

Promotional Planning

Global Opportunities for Small Businesses

Professional Management and the Small Business

Managing Human Resources

Managing Small Business Operations

Managing the Firms Assets

Managing Risk

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