Exam 41: Types of Business Organizations

A sole proprietor is subject to unlimited personal liability for the debts of the business.

A corporation must have at least two shareholders.

A corporation is a separate legal entity capable of owning property,contracting,and being sued in its own name.

Business corporations exist to make a profit.

An arrangement in which the owner of a trademark licenses others,under specified conditions or limitations,to use the trademark in purveying goods or services is a(n):

Theoretically,the relationship between a franchisor and a franchisee is one of:

The process of incorporation involves the expenditure of funds for organizational expenses.

Franchise agreements frequently contain an arbitration provision under which a neutral party is to make a final and binding determination whether there has been a breach of the contract sufficient to justify cancellation of the franchise.

An unincorporated association cannot sue or be sued in its own name.

The major advantage to investors in a corporation stems from the fact that their risk of loss is limited to the amount of their investment.

If there is a joint venture,the fault or negligence of one venturer will not be imputed to the other venturers.

A limited liability partnership:

Arnold was the sole shareholder,president,and chief executive officer of Algernon Enterprises,Inc.Acting on behalf of Algernon,Arnold negotiated the credit purchase of inventory from Amax.The contract was signed in the name of Algernon Enterprises.Algernon never paid the sums due on the contract,and Arnold and the corporation were sued.Is Arnold personally liable to Amax?