Name:
Class:
Date:
chapter 8
Page 13
c. the advisory board is required to meet quarterly, not annually. d.
the advisory board has no legal authority over the owner or the company.
103. Webster is reviewing resumes looking for candidates for leadership positions in his very young company. Webster is
putting together his:
a. business plan. b. advisory board.
c. board of directors. d. management team.
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
104. The governing body of a corporation, elected by the stockholders
105. A partner who is not active in the management of the partnership and has limited personal liability
106. A business organization that is recognized by the law as having a separate existence
107. A form of corporation for enterprises established to serve civic, educational, charitable, or religious purposes
108. An interconnected system of relationships with other people
109. A partner who has unlimited personal liability
110. A form of organization in which owners have limited liability but pay personal income taxes on business profits
111. A group that serves as an alternative to a board of directors
112. The advantage created by an individual’s connections with other people
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
Name:
Class:
Date:
chapter 8
Page 14
j. strategic alliance
113. Managers and other key persons who give a company its general direction
114. The right of stockholders to buy new shares of stock before they are offered to the public
115. A business organization that exists as a legal entity and provides limited liability to its owners
116. An organizational relationship that links two or more independent business entities in a common endeavor
117. A situation in which the courts conclude that incorporation has been used to perpetrate a fraud
118. A document specifying the number of shares owned by a stockholder
119. A document that states explicitly the rights and duties of partners
120. A powerful sense of obligation to repay in kind what another has done for or provided to us
121. Verification of whether a nonprofit organization is staying true to its stated purpose
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
122. An ordinary corporation taxed by the federal government as a separate legal entity
123. A form of corporation that shields owners from liability and is set up for individuals in certain professional practices
124. A document that establishes a corporation’s existence
125. Liability on the part of an owner that extends beyond the owner’s investment in the business
126. A type of corporation that offers limited liability to its owners and passes taxable income or losses on to the
stockholders
127. A document that specifies the size of the board of directors, the duties and responsibilities of directors and officers,
the scheduling of regular meetings, voting rights, and restrictions on the transfer of stock
128. A business owned by one person, who bears unlimited liability for the enterprise
129. A partnership with at least one general partner and one or more limited partners
Name:
Class:
Date:
chapter 8
Page 15
130. A legal entity formed by two or more co-owners to operate a business for profit
131. A form of corporation that creates a positive social or environmental impact while maintaining high standards of
transparency and accountability
132. Discuss the differences in the continuity of business for sole proprietorships, partnerships, and corporations.
133. What steps could an entrepreneur take to improve their chances of success when forming a strategic alliance?
134. What advantages do small businesses have in forming a strategic alliance with another small business as opposed to a
small business forming an alliance with a large company? Give an example to support the answer.
135. What are the qualifications of partners?
136. Discuss the concept of achieving balance in a management team.
137. Explain the importance of social capital to a small business owner. How does this concept relate to reciprocation?
138. What are selection characteristics for choosing board members?
139. Explain how income is taxed in a sole proprietorship, a partnership, and a C corporation. Include in your discussion
how dividends are taxed.
140. In what situations would it be best for a company to be formed as a C corporation as opposed to a limited liability
company?
141. What is the principal advantage of an S corporation over a C corporation?
142. Explain the advantages of having outsiders (non-employees) as board members.
143. 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?
144. 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?
145. Identify the three general forms of legal organization. What are the major differences between these forms?
146. What services are board members expected to perform for the corporation?
147. Julie and Diane are starting a new company decorating wedding cakes that are unique in their design and
structure. Both women are certified chefs and have ten years of experience between them. What issues should they
consider in choosing between a general partnership or a limited liability company? Which form would you recommend?
Name:
Class:
Date:
chapter 8
Page 16
Answer Key
1. True
2. False
Name:
Class:
Date:
chapter 8
Page 17
26. False
27. False
28. c
29. c
30. a
31. a
32. d
33. b
34. d
35. b
36. c
37. c
38. b
39. b
40. a
41. c
42. a
43. b
44. a
45. b
46. a
47. c
48. b
49. b
50. d
51. c
Name:
Class:
Date:
chapter 8
Page 18
52. c
Name:
Class:
Date:
chapter 8
Page 19
77. b
Name:
Class:
Date:
chapter 8
Page 20
Name:
Class:
Date:
chapter 8
Page 21
Name:
Class:
Date:
chapter 8
Page 22
Name:
Class:
Date:
chapter 8