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CHAPTER 3
ORGANIZING AND FINANCING A NEW VENTURE
True-False Questions
that the limited partnership has partners who actively manage the day-to-day
operations but also has passive investors.
obligations to the amount each paid for their partnership interests.
from the business’ assets, but the personal liabilities of the owners are not.
seize only some of the corporation’s assets.
the corporate charter.
liability and its earnings are taxed at the corporate rate.
and losses of the business pass directly through to investors on the basis
specified in the partnership agreement.
employee about the terms and conditions of employment including the
employee’s agreement to keep confidential information secret and to assign
ideas and inventions to the employer.
friends.
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corporate structures that “states” provide for professionals such as physicians,
dentists, lawyers, and accountants.
corporations than for individuals.
higher for corporations than for individuals.
percent.
intellectual property.
labor union).
labor union).
to protect intellectual property.
a work to be protected.
work’s creation is enough to provide copyright protection.
services, and processes.
Chapter 3: Organizing and Financing a New Venture
19
the underlying computer codes, programs, and technology.
useful, novel, and obvious.
intellectual property from sharing it with others once it has been presented the
first time.
when disclosure must be made to an outside individual or organization.
inventions and information (e.g., formulas, processes, customer lists, etc.) not
generally known to others.
differentiate their products and services through the use of unique marks.
in exchange for the excitement of launching the business, as well as a share of
the firm’s financial gains.
labor union.
electronically stored forms.
Multiple-Choice Questions
protection of limited liability?
a. proprietorship
b. limited partnership
c. corporation
d. subchapter S corporation
e. limited liability corporation
Chapter 3: Organizing and Financing a New Venture
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by the income flowing to shareholders taxed at personal tax rates?
a. proprietorship
b. limited partnership
c. corporation
d. subchapter S corporation
e. general partnership
start-up time and lowest legal costs?
a. proprietorship
b. limited partnership
c. corporation
d. subchapter S corporation
e. limited liability corporation
ownership?
a. proprietorship
b. limited partnership
c. corporation
d. subchapter S corporation
e. general partnership
life? a. proprietorship
b. limited partnership
c. limited liability corporation
d. subchapter S corporation
e. general partnership
a. participation in profits and losses
b. some liability for partnership obligations
c. veto right on new partners
d. eventual return of capital
e. access to partnership books
the
a. corporate charter
b. articles of incorporation
c. corporate bylaws
d. confidentiality disclosure agreements
Chapter 3: Organizing and Financing a New Venture
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e. partnership agreements
group is called:
a. joint and several liability
b. joint liability
c. limited liability
d. accrued liability
e. general liability
with limited investor liability and passes its income before taxes through to the
owners?
a. partnership
b. subchapter S (or S) corporation
c. regular or (C ) corporation
d. limited liability company (LLC)
e. both a and b
f. both b and d
Subchapter S (or S) corporation business form?
a. 74
b. 125
c. 130
d. 500
taxed at which of the following marginal tax rates:
a. 05.0%
b. 10.0%
c. 15.0%
d. 20.0%
e. 25.0%
at which of the following marginal tax rates:
a. 05.0%
b. 10.0%
c. 15.0%
d. 20.0%
e. 25.0%
taxable income is:
Chapter 3: Organizing and Financing a New Venture
22
a. 25.0%
b. 28.0%
c. 33.0%
d. 35.0%
e. 40.0%
taxable income is:
a. 25.0%
b. 28.0%
c. 35.0%
d. 38.0%
e. 39.0%
Note: The following information should be used for multiple choice questions 15-19.
Following is a partial 2012 personal income tax schedule for a single filer:
Taxable Income
Beginning Ending Bracket Marginal
Amount Amount Amount Tax Rate
$1 $8,700 $8,700 0.10
$8,700 $35,350 $26,650 0.15
$35,350 $85,650 $50,300 0.25
income of $8,700 would be:
a. $150
b. $870
c. $3,840
d. $4,675
e. $10,385
has taxable income of $35,350 would be:
a. $150
b. $835
c. $3,840
d. $4,867.50
e. $10,385
“bracket” paid by a single filer with taxable income of $85,650 would be:
a. $150
b. $870
c. $3,997.50
Chapter 3: Organizing and Financing a New Venture
23
d. $4,675
e. $12,575
would be:
a. 10.0%
b. 13.8%
c. 15.0%
d. 16.7%
e. 20.0%
c. 19. The average tax rate for a single filer with taxable income of $85,650
would be:
a. 14.7%
b. 16.7%
b. 20.0%
c. 20.4%
d. 25.0%
Note: The following information should be used for multiple choice questions 20-36.
Following is a partial 2012 corporate income tax schedule:
Taxable Income
Beginning Ending Bracket Marginal
Amount Amount Amount Tax Rate
$1 $50,000 $50,000 0.15
$50,000 $75,000 $25,000 0.25
$75,000 $100,000 $25,000 0.34
income of $50,000 would be:
a. $1,500
b. $6,250
c. $7,500
d. $8,500
e. $10,850
taxable income of $75,000 would be:
a. $6,250
b. $7,500
c. $8,500
d. $13,750
e. $22,250
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bracket paid by a corporation with taxable income of $100,000 would be:
a. $6,250
b. $7,500
c. $8,500
d. $13,750
e. $22,250
would be:
a. 15.0%
b. 18.3%
c. 20.0%
d. 22.7%
e. 25.0%
would be:
a. 15.0%
b. 16.75%
c. 20.0%
d. 22.25%
e. 25.0%
a. patents
b. trademarks
c. legal disclaimers
d. copyrights
e. trade secrets
inventions that are useful, novel, and non-obvious?
a. patents
b. trademarks
c. legal disclaimers
d. copyrights
e. trade secrets
inventions and information such as formulas, processes, and customer lists that
are not generally known to others and which convey economic advantage to
the holders?
a. patents
b. trademarks
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c. legal disclaimers
d. copyrights
e. trade secrets
differentiate their products and services through the use of unique marks which
allow consumers to easily identify the source and quality of the products and
services?
a. patents
b. trademarks
c. legal disclaimers
d. copyrights
e. trade secrets
written and electronically stored forms?
a. patents
b. trademarks
c. legal disclaimers
d. copyrights
e. trade secrets
a. family and friends
b. the entrepreneur’s physical and financial assets
c. business angels
d. venture capitalists
e. stock and bond markets
excitement of launching a business and a share in any financial rewards are
known as:
a. creditors
b. white knights
c. corporate raiders
d. business angels
e. stakeholders
a. early stages of a venture’s lifecycle
b. middle stages of a venture’s lifecycle
c. maturity stage of a venture’s lifecycle
d. all of the above
Chapter 3: Organizing and Financing a New Venture
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protection limit increased from 17 to 20 years?
a. copyrights
b. trademarks
c. patents
d. trade secrets
a. not useful, novel, and non-obvious
b. not useful, not novel, and obvious
c. useful, novel, and non-obvious
d. useful, not novel, and obvious
and processes, are referred to as:
a. design patents
b. plant patents
c. utility patents
d. electrical patents
e. mechanical patents
stored forms are protected by:
a. Patents
b. copyrights
c. trade secrets
d. trademarks
has a protection limit of 20 years?
a. copyrights
b. patents
c. trade secrets
d. trademarks
a. indicate membership in a trade group
b. indicate a certain brand of service
c. indicate quality
d. are symbols used to associate products to a specific brand
a. Utility
b. Design
Chapter 3: Organizing and Financing a New Venture
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c. Mark
d. Plant
e. Business method
a. Trademark
b. Service mark
c. Collective mark
d. Certification mark
e. Design mark
a. funds from business angels and venture capitalists
b. the entrepreneur’s personal assets
c. funds from family and friends
d. a, b, and c
e. only b and c
associated with products is:
a. trademarks
b. service marks
c. collective marks
d. certification marks