Question 1

A founders' agreement is a written document that deals with issues such as the relative split of the equity among the founders of the firm.

Accepted Answer

A) True 
 B)False

Question 2

What is a founders' agreement? Describe the purpose of a buyback clause and why it's important?

Accepted Answer

A founders' (or shareholders') agreement

Question 3

Few entrepreneurial firms start as subchapter S corporations.

Accepted Answer

A) True 
 B)False

Question 4

The limited liability corporation is a form of business organization that is rapidly losing popularity in the United States.

Accepted Answer

A) True 
 B)False

Question 5

________ are a special form of incentive compensation. These plans provide employees the option or right to buy a certain number of shares of their company's stock at a stated price over a certain period of time.

Accepted Answer

A)  Corporate options 
B)  Collective plans 
C)  Share plans 
D)  Stock options 
E)  Dividends 
A)  Corporate options 
B)  Collective plans 
C)  Share plans 
D)  Stock options 
E)  Dividends

Question 6

In a ________ corporation, the voting stock is held by a small number of individuals and is very thinly or infrequently traded.

Accepted Answer

A)  public 
B)  private 
C)  narrow 
D)  cautious public 
E)  closely-held 
A)  public 
B)  private 
C)  narrow 
D)  cautious public 
E)  closely-held

Question 7

A(n) ________ details the responsibilities and the ownership shares of the partners involved with an organization.

Accepted Answer

A)  partnership agreement 
B)  industry contract 
C)  business pledge 
D)  business agreement 
E)  partnership pledge 
A)  partnership agreement 
B)  industry contract 
C)  business pledge 
D)  business agreement 
E)  partnership pledge

Question 8

The vast majority of corporations in the United States are public corporations.

Accepted Answer

A) True 
 B)False

Question 9

The ________ is a form of business organization that is rapidly gaining popularity in the United States. The concept originated in Germany and was first introduced in the United States in the state of Wyoming.

Accepted Answer

A)  limited partnership 
B)  general partnership 
C)  limited liability company 
D)  subchapter S corporation 
E)  C corporation 
A)  limited partnership 
B)  general partnership 
C)  limited liability company 
D)  subchapter S corporation 
E)  C corporation

Question 10

A ________ partnership is a modified form of a general partnership.

Accepted Answer

A)  restricted 
B)  limited 
C)  partial 
D)  constrained 
E)  fractional 
A)  restricted 
B)  limited 
C)  partial 
D)  constrained 
E)  fractional

Question 11

Facebook's Code of Conduct has ________ sections.

Accepted Answer

A)  3 
B)  13 
C)  8 
D)  11 
E)  7 
A)  3 
B)  13 
C)  8 
D)  11 
E)  7

Question 12

A corporation is formed by filing ________ with the Secretary of State's office in the state of incorporation.

Accepted Answer

A)  a certificate of intent to incorporate 
B)  articles of business 
C)  corporate credentials 
D)  a corporation permit 
E)  articles of incorporation 
A)  a certificate of intent to incorporate 
B)  articles of business 
C)  corporate credentials 
D)  a corporation permit 
E)  articles of incorporation

Question 13

Most C corporations have two classes of stock- ________ and ________.

Accepted Answer

A)  premium; normal 
B)  common; preferred 
C)  standard; substandard 
D)  regular; special 
E)  ordinary; distinct 
A)  premium; normal 
B)  common; preferred 
C)  standard; substandard 
D)  regular; special 
E)  ordinary; distinct

Question 14

Billy Goat Ice Cream, the company profiled in the opening feature in Chapter 7, is a ________.

Accepted Answer

A)  limited liability corporation 
B)  sole proprietorship 
C)  partnership 
D)  Schedule S corporation 
E)  Schedule C corporation 
A)  limited liability corporation 
B)  sole proprietorship 
C)  partnership 
D)  Schedule S corporation 
E)  Schedule C corporation

Question 15

Which of the following statements about limited partnerships is incorrect?

Accepted Answer

A)  A limited partnership is a modified form of a general partnership. 
B)  Limited partnerships are common in real estate and oil and gas exploration. 
C)  A limited partnership is usually formed to raise money or to spread out the risk of a venture without forming a corporation. 
D)  Both the limited partners and the general partners are responsible for the debts and obligations of the partnership. 
E)  A limited partnership contains two classes of owners-general and limited partners. 
A)  A limited partnership is a modified form of a general partnership. 
B)  Limited partnerships are common in real estate and oil and gas exploration. 
C)  A limited partnership is usually formed to raise money or to spread out the risk of a venture without forming a corporation. 
D)  Both the limited partners and the general partners are responsible for the debts and obligations of the partnership. 
E)  A limited partnership contains two classes of owners-general and limited partners.

Question 16

The idea that it's important to get "everything in writing" in regard to business agreements causes unnecessary work and can lead to an erosion of trust between business partners.

Accepted Answer

A) True 
 B)False

Question 17

It is important for an entrepreneur to select an attorney as late as possible when developing a business venture.

Accepted Answer

A) True 
 B)False

Question 18

Jessica Marsh just took a job with Instagram. As part of her employment contract, Jessica signed an agreement that states that she will not disclose any of Instagram's trade secrets. The agreement that Jessica signed is called a(n) ________ agreement.

Accepted Answer

A)  nondisclosure 
B)  non breach-of-trust 
C)  ethics 
D)  binding confidentiality 
E)  legitimacy 
A)  nondisclosure 
B)  non breach-of-trust 
C)  ethics 
D)  binding confidentiality 
E)  legitimacy

Question 19

In which form of business ownership are the owners called "members"?

Accepted Answer

A)  general partnership 
B)  limited partnership 
C)  limited liability company 
D)  subchapter C corporation 
E)  C corporation 
A)  general partnership 
B)  limited partnership 
C)  limited liability company 
D)  subchapter C corporation 
E)  C corporation

Question 20

A(n) ________ agreement binds an employee or another party to not disclose a company's trade secret. A ________ agreement prevents an individual from competing against a former employer for a specific period of time.

Accepted Answer

A)  nondisclosure; noncompete 
B)  non breach-of-trust; nonchallenge 
C)  voluntary truth; nonparticipate 
D)  binding confidentiality; noncompete 
E)  ethics; nonparticipate 
A)  nondisclosure; noncompete 
B)  non breach-of-trust; nonchallenge 
C)  voluntary truth; nonparticipate 
D)  binding confidentiality; noncompete 
E)  ethics; nonparticipate

A founders' agreement is a written document that deals with issues such as the relative split of the equity among the founders of the firm.

What is a founders' agreement? Describe the purpose of a buyback clause and why it's important?

Few entrepreneurial firms start as subchapter S corporations.

The limited liability corporation is a form of business organization that is rapidly losing popularity in the United States.

________ are a special form of incentive compensation. These plans provide employees the option or right to buy a certain number of shares of their company's stock at a stated price over a certain period of time.

In a ________ corporation, the voting stock is held by a small number of individuals and is very thinly or infrequently traded.

A(n) ________ details the responsibilities and the ownership shares of the partners involved with an organization.

The vast majority of corporations in the United States are public corporations.

The ________ is a form of business organization that is rapidly gaining popularity in the United States. The concept originated in Germany and was first introduced in the United States in the state of Wyoming.

A ________ partnership is a modified form of a general partnership.

Facebook's Code of Conduct has ________ sections.

A corporation is formed by filing ________ with the Secretary of State's office in the state of incorporation.

Most C corporations have two classes of stock- and .

Billy Goat Ice Cream, the company profiled in the opening feature in Chapter 7, is a ________.

Which of the following statements about limited partnerships is incorrect?

The idea that it's important to get "everything in writing" in regard to business agreements causes unnecessary work and can lead to an erosion of trust between business partners.

It is important for an entrepreneur to select an attorney as late as possible when developing a business venture.

Jessica Marsh just took a job with Instagram. As part of her employment contract, Jessica signed an agreement that states that she will not disclose any of Instagram's trade secrets. The agreement that Jessica signed is called a(n) ________ agreement.

In which form of business ownership are the owners called "members"?

A(n) agreement binds an employee or another party to not disclose a company's trade secret. A agreement prevents an individual from competing against a former employer for a specific period of time.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

Assessing a New Ventures Financial Strength and Viability

Building a New-Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters

Exam 7: Preparing the Proper Ethical and Legal Foundation

A founders' agreement is a written document that deals with issues such as the relative split of the equity among the founders of the firm.

What is a founders' agreement? Describe the purpose of a buyback clause and why it's important?

Few entrepreneurial firms start as subchapter S corporations.

The limited liability corporation is a form of business organization that is rapidly losing popularity in the United States.

________ are a special form of incentive compensation. These plans provide employees the option or right to buy a certain number of shares of their company's stock at a stated price over a certain period of time.

In a ________ corporation, the voting stock is held by a small number of individuals and is very thinly or infrequently traded.

A(n) ________ details the responsibilities and the ownership shares of the partners involved with an organization.

The vast majority of corporations in the United States are public corporations.

The ________ is a form of business organization that is rapidly gaining popularity in the United States. The concept originated in Germany and was first introduced in the United States in the state of Wyoming.

A ________ partnership is a modified form of a general partnership.

Facebook's Code of Conduct has ________ sections.

A corporation is formed by filing ________ with the Secretary of State's office in the state of incorporation.

Most C corporations have two classes of stock- ________ and ________.

Billy Goat Ice Cream, the company profiled in the opening feature in Chapter 7, is a ________.

Which of the following statements about limited partnerships is incorrect?

The idea that it's important to get "everything in writing" in regard to business agreements causes unnecessary work and can lead to an erosion of trust between business partners.

It is important for an entrepreneur to select an attorney as late as possible when developing a business venture.

Jessica Marsh just took a job with Instagram. As part of her employment contract, Jessica signed an agreement that states that she will not disclose any of Instagram's trade secrets. The agreement that Jessica signed is called a(n) ________ agreement.

In which form of business ownership are the owners called "members"?

A(n) ________ agreement binds an employee or another party to not disclose a company's trade secret. A ________ agreement prevents an individual from competing against a former employer for a specific period of time.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

Assessing a New Ventures Financial Strength and Viability

Building a New-Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters

Most C corporations have two classes of stock- and .

A(n) agreement binds an employee or another party to not disclose a company's trade secret. A agreement prevents an individual from competing against a former employer for a specific period of time.