Question 1

Match the terms with their definitions.Some terms may not be used.
a.advisory board
b.B corporation
c.C corporation
d.corporate bylaws
e.corporate charter
f.limited partnership
g.partnership
h.professional corporation
i.S corporation
j.sole proprietorship
k.​unlimited liability
-A legal entity formed by two or more co-owners to operate a business for profit

Accepted Answer

The answer of Match the terms with their definitions.Some terms...

Question 2

The legal document that spells out the partners' rights and duties is called the

Accepted Answer

A) articles of incorporation. 
B) partnership agreement. 
C) partnership by-laws. 
D) SS-4 form.

Question 3

A nonprofit corporation can be for civic,educational,charitable,or religious purposes and must pass the organizational test of not making a profit.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) partnership 
B) C corporation 
C) S corporation 
D) It is not taxed.

Question 5

An owner in a professional corporation is shielded from:

Accepted Answer

A) their own liability. 
B) the liability of other owners. 
C) both their own liability and the liability of others. 
D) none of the above.

Question 6

S corporations can have nonresident alien stockholders but no more than 50 stockholders.

Accepted Answer

A) True 
 B)False

Question 7

Lothian has asked five of his friends to serve on the board of directors of his new corporation.Why is this not a good idea?

Accepted Answer

A) Friends are too dispassionate about the operations of the corporation. 
B) Friends are unlikely to disagree with the owner on matters brought before the board. 
C) Only stockholders can elect the board of directors so it is illegal for the owner to invite friends. 
D) Friends will find out too much about Lothian's personal business.

Question 8

An advisory board functions like a board of directors does,except that the members are compensated for their services and the company must have Directors and Officers Liability insurance.

Accepted Answer

A) True 
 B)False

Question 9

Larry Knave,MD,is an owner in a professional corporation.If Dr.Knave is sued for malpractice,what is the liability of the rest of the owners?

Accepted Answer

A) They are protected from liability for his actions. 
B) They are responsible for his actions. 
C) The professional corporation is liable for his actions. 
D) No one is responsible for Dr.Knave's actions.

Question 10

Explain the importance of social capital to a small business owner.How does this concept relate to reciprocation?

Accepted Answer

The answer of Explain the importance of social capital to...

Question 11

The board of directors is elected by the stockholders of a corporation.

Accepted Answer

A) True 
 B)False

Question 12

Match the term with its definition.Some terms may not be used.
a.advisory board
b.board of directors
c.general partner
d.legal entity
e.limited liability company
f.limited partner
g.nonprofit corporation
h.partnership agreement
i.social capital
j.social network
-An interconnected system of relationships with other people

Accepted Answer

The answer of Match the term with its definition.Some terms...

Question 13

Jeff has started a new company that involves building planters and garden art from local sustainable products.Should he form a board of directors or an advisory council?

Accepted Answer

The answer of Jeff has started a new company that...

Question 14

In a limited partnership,which partner remains bound by all debts of the business?

Accepted Answer

A) limited partner 
B) special partner 
C) partner with the greatest capital investment 
D) general partner

Question 15

A corporate charter should be:

Accepted Answer

A) very detailed. 
B) prepared by the founder. 
C) broad in the statement of the firm's power. 
D) lengthy and precise.

Question 16

A corporation:

Accepted Answer

A) is chartered under state laws. 
B) is chartered under federal laws. 
C) remains in existence only as long as its owners are alive. 
D) shifts liability of its debts to its owners.

Question 17

Match the term with its definition.Some terms may not be used.
a.advisory board
b.corporation
c.management team
d.organizational test
e.partnership agreement
f.piercing the corporate veil
g.preemptive right
h.reciprocation
i.stock certificate
j.strategic alliance
-An organizational relationship that links two or more independent business entities in a common endeavor

Accepted Answer

The answer of Match the term with its definition.Some terms...

Question 18

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.

Question 19

Rod is starting a new business as a drystone mason where he builds and repairs rock walls that do not have any mortar.He has completed national certification and will be working most jobs by himself.What issues should he consider in choosing the legal form? Based on this information,what legal form would you recommend for him to choose?

Accepted Answer

The answer of Rod is starting a new business as...

Question 20

Among the advantages of hiring family for leadership positions in a new company is the fact that:

Accepted Answer

A) federal wage and hour laws do not apply to family members. 
B) the owner does not have to provide fringe benefits for them. 
C) they will often work for less compensation than non-family candidates. 
D) they share liability in the event of a business failure.

Exam 8: The Organizational Plan: Teams, legal Structures, alliances, and Directors

The legal document that spells out the partners' rights and duties is called the

A nonprofit corporation can be for civic,educational,charitable,or religious purposes and must pass the organizational test of not making a profit.

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

An owner in a professional corporation is shielded from:

S corporations can have nonresident alien stockholders but no more than 50 stockholders.

Lothian has asked five of his friends to serve on the board of directors of his new corporation.Why is this not a good idea?

An advisory board functions like a board of directors does,except that the members are compensated for their services and the company must have Directors and Officers Liability insurance.

Larry Knave,MD,is an owner in a professional corporation.If Dr.Knave is sued for malpractice,what is the liability of the rest of the owners?

Explain the importance of social capital to a small business owner.How does this concept relate to reciprocation?

The board of directors is elected by the stockholders of a corporation.

Jeff has started a new company that involves building planters and garden art from local sustainable products.Should he form a board of directors or an advisory council?

In a limited partnership,which partner remains bound by all debts of the business?

A corporate charter should be:

A corporation:

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

Among the advantages of hiring family for leadership positions in a new company is the fact that: