CHAPTER 31—INTRODUCTION TO BUSINESS
ORGANIZATION Key
1. Which of the following best describes sole proprietorship?
2. Which of the following is true of a sole proprietorship business?
3. A _____ partnership is one devoted to providing services, such as accounting, medicine, law, and, similar
professional services.
4. Which of the following is true of limited liability partnerships?
5. Which of the following is true of nominal partners?
6. An active partner who attempts to conceal that fact from the public is a _____ partner.
7. Zen Corp, an Australian company, and Pluto Inc, an American company, entered into a one-time contract to
build an elevated expressway in Florida. The contract was for a period of five years and both companies were
held equally liable under the contract. This type of business venture is known as a _____.
8. Which of the following is true of limited liability companies?
9. In a sole proprietorship, the proprietor has ultimate responsibility for business decisions.
10. In a sole proprietorship, the proprietor has significant flexibility in managing the business.
11. While registering a fictitious name, a business need not disclose the names and addresses of the owners.
12. A sole proprietor is not liable for crimes committed by the business.
13. A trading partnership is one engaged in buying and selling merchandise.
14. A general partner has limited liability in respect to the partnership debts.
15. A silent partner is one who takes no active part in the business.
16. By operating as a partnership instead of a proprietorship, the ratio of expenses per dollar of business tends to
increase.
17. The owners or investors of a limited liability company are called members.
18. For a limited liability company with two or more members, the default tax classification is that of a sole
proprietorship.
19. The LLC can be dissolved with the written consent of all members.
20. What are the important features of a limited liability company? Explain.