Question 1

List and briefly describe three specific steps that an entrepreneurial organization can take to build a strong ethical culture.

Accepted Answer

(1) Lead by example. The most important

Question 2

Most founders' agreements include a ________, which legally obligates the departing founder to sell to the remaining founders his or her interest in the firm if the remaining founders are interested.

Accepted Answer

A)  redemption clause 
B)  buyback clause 
C)  statutory purchase clause 
D)  voluntary recoup clause 
E)  shareholder surrender clause 
A)  redemption clause 
B)  buyback clause 
C)  statutory purchase clause 
D)  voluntary recoup clause 
E)  shareholder surrender clause

Question 3

A ________ sets forth the rights and duties of the general partners and limited partners, along with the details of how the partnership will be managed and eventually dissolved.

Accepted Answer

A)  partnership accord 
B)  restricted partnership agreement 
C)  business partnership agreement 
D)  limited partnership concurrence 
E)  limited partnership agreement 
A)  partnership accord 
B)  restricted partnership agreement 
C)  business partnership agreement 
D)  limited partnership concurrence 
E)  limited partnership agreement

Question 4

According to the textbook, the single most important thing the founders of an entrepreneurial venture can do is:

Accepted Answer

A)  start a board of advisors 
B)  establish business partnerships 
C)  make money 
D)  select a limited liability corporate opposed to an S-corporation 
E)  establish a strong ethical culture for their firms 
A)  start a board of advisors 
B)  establish business partnerships 
C)  make money 
D)  select a limited liability corporate opposed to an S-corporation 
E)  establish a strong ethical culture for their firms

Question 5

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 6

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

Accepted Answer

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

Question 7

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

Accepted Answer

A founders' agreement (or shareholders'

Question 8

________ 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 9

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 10

Describe the purpose of a nondisclosure agreement. Provide an example of when a nondisclosure agreement kicks in.

Accepted Answer

A nondisclosure agreement is a promise m

Question 11

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 12

Large firms like 3M, Google, Oracle, and Microsoft, that trade on organized stock exchanges, are:

Accepted Answer

A)  limited partnerships 
B)  limited liability companies 
C)  subchapter S corporations 
D)  C corporations 
E)  general partnerships 
A)  limited partnerships 
B)  limited liability companies 
C)  subchapter S corporations 
D)  C corporations 
E)  general partnerships

Question 13

Which of the following is a disadvantage of a limited liability company?

Accepted Answer

A)  Because profits are taxed only at the shareholder level, there is no double taxation. 
B)  The number of shareholders is unlimited. 
C)  The number of members, tax issues, and implementation is flexible. 
D)  Tax accounting can be complicated. 
E)  limited liability. 
A)  Because profits are taxed only at the shareholder level, there is no double taxation. 
B)  The number of shareholders is unlimited. 
C)  The number of members, tax issues, and implementation is flexible. 
D)  Tax accounting can be complicated. 
E)  limited liability.

Question 14

The most important thing that any entrepreneur, or team of entrepreneurs, can do to build a strong ethical culture in their organization is to hire an aggressive attorney.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

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

Question 16

Few entrepreneurial firms start as subchapter S corporations.

Accepted Answer

A) True 
 B)False

Question 17

Most C corporations have two classes of stock:

Accepted Answer

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

Question 18

Which of the following statements is incorrect regarding sole proprietorships?

Accepted Answer

A)  There is one owner. 
B)  Sole proprietor is in full control. 
C)  Business ends at the owner's death or loss of interest in the business. 
D)  Liquidity of the investment is high. 
E)  Money must be raised by the sole proprietor. 
A)  There is one owner. 
B)  Sole proprietor is in full control. 
C)  Business ends at the owner's death or loss of interest in the business. 
D)  Liquidity of the investment is high. 
E)  Money must be raised by the sole proprietor.

Question 19

Which of the following is not an advantage of a general partnership?

Accepted Answer

A)  Businesses losses can be deducted against the partners' other source of income. 
B)  The skills and abilities of more than one individual are available to the firm. 
C)  The liquidity of each partner's investment is low. 
D)  Creating one is relatively easy and inexpensive compared to a c corporation or limited liability company. 
E)  It is not subject to double taxation. 
A)  Businesses losses can be deducted against the partners' other source of income. 
B)  The skills and abilities of more than one individual are available to the firm. 
C)  The liquidity of each partner's investment is low. 
D)  Creating one is relatively easy and inexpensive compared to a c corporation or limited liability company. 
E)  It is not subject to double taxation.

Question 20

A noncompete agreement prevents an individual from competing against a former employer for a specific period of time.

Accepted Answer

A) True 
 B)False

List and briefly describe three specific steps that an entrepreneurial organization can take to build a strong ethical culture.

Most founders' agreements include a ________, which legally obligates the departing founder to sell to the remaining founders his or her interest in the firm if the remaining founders are interested.

A ________ sets forth the rights and duties of the general partners and limited partners, along with the details of how the partnership will be managed and eventually dissolved.

According to the textbook, the single most important thing the founders of an entrepreneurial venture can do is:

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.

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

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

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

Describe the purpose of a nondisclosure agreement. Provide an example of when a nondisclosure agreement kicks in.

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

Large firms like 3M, Google, Oracle, and Microsoft, that trade on organized stock exchanges, are:

Which of the following is a disadvantage of a limited liability company?

The most important thing that any entrepreneur, or team of entrepreneurs, can do to build a strong ethical culture in their organization is to hire an aggressive attorney.

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

Few entrepreneurial firms start as subchapter S corporations.

Most C corporations have two classes of stock:

Which of the following statements is incorrect regarding sole proprietorships?

Which of the following is not an advantage of a general partnership?

A noncompete 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

Writing a Business Plan

Industry and Competitor Analysis

Developing an Effective Business Model

Assessing a New Venture's 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

List and briefly describe three specific steps that an entrepreneurial organization can take to build a strong ethical culture.

Most founders' agreements include a ________, which legally obligates the departing founder to sell to the remaining founders his or her interest in the firm if the remaining founders are interested.

A ________ sets forth the rights and duties of the general partners and limited partners, along with the details of how the partnership will be managed and eventually dissolved.

According to the textbook, the single most important thing the founders of an entrepreneurial venture can do is:

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.

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

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

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

Describe the purpose of a nondisclosure agreement. Provide an example of when a nondisclosure agreement kicks in.

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

Large firms like 3M, Google, Oracle, and Microsoft, that trade on organized stock exchanges, are:

Which of the following is a disadvantage of a limited liability company?

The most important thing that any entrepreneur, or team of entrepreneurs, can do to build a strong ethical culture in their organization is to hire an aggressive attorney.

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

Few entrepreneurial firms start as subchapter S corporations.

Most C corporations have two classes of stock:

Which of the following statements is incorrect regarding sole proprietorships?

Which of the following is not an advantage of a general partnership?

A noncompete 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

Writing a Business Plan

Industry and Competitor Analysis

Developing an Effective Business Model

Assessing a New Venture's 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