50) In a limited liability corporation, a firm can have more than ________ investors.
A) 25
B) 50
C) 75
D) 100
51) Which of the following is the simplest form of business to establish?
A) Limited partnership
B) Draws
C) Partnerships
D) Sole proprietorship
52) A defining characteristic of one of the various forms of organization is that it allows other
corporations to hold stock in the company. This type of organization is known as a ________.
A) sole proprietorship
B) Subchapter C Corporation
C) limited liability company
D) Subchapter S Corporation
53) A ________ is an agreement between two parties to perform certain activities for some
consideration.
A) contract
B) limited partnership
C) corporation
D) warranty
54) Sea Waves Tours and Avis Travels enter into a formal agreement with each other. Under this
agreement, over the next year, Sea Waves Tours will recommend Avis Travels to all its customers.
Avis Travels will pay a small commission for every new customer they gain as a result of this
recommendation. In this scenario, Sea Waves Tours and Avis Travels have
A) signed a contract with each other.
B) formed a limited liability partnership.
C) entered into a general partnership.
D) created a Subchapter C Corporation.
55) In the context of partnerships, ________ are funds distributed directly from the business. They
are usually in the form of a cash dispersion in advance of salary, bonus, and expected year-end
distribution.
A) trademarks
B) patents
C) draws
D) contracts
56) A ________ is a contract where a business will be physically located.
A) premise
B) lease
C) warranty
D) pro forma
57) In a lease, a landowner can enter a business premises for all the following reasons EXCEPT
A) when the landowner wants to manage the rental property.
B) when the landowner wants to inspect it.
C) whenever the landowner wants to.
D) when checking to see if anything is illegal.
58) Which of the following questions should a new business owner examine when considering
leases?
A) Who is responsible for maintenance and improvements?
B) Is there an ability to renew the lease?
C) What exactly is the new business owner leasing?
D) All of these
59) Marsciva Technologies is an emerging business. The firm considers the owners to be
employees of the firm and therefore pays them salaries and bonuses. To reduce corporate tax, the
owners of Marsciva Technologies pay themselves nearly all the profits generated so that very little
actual profits are reported by the firm. Based on these characteristics, Marsciva Technologies is
most likely a
A) sole proprietorship.
B) limited partnership.
C) Subchapter S Corporation.
D) Subchapter C Corporation.
60) If a small business has employees, the business must have a(n) ________.
A) NAICS Code
B) Employer Identification Number (EIN)
C) U.S. Industry Code
D) Business Rating Code
61) An excellent source of information on rules and regulations a business must comply with can
be found at the ________.
A) Local Information Center
B) Chamber of Commerce
C) Government Relations Center
D) Small Business Assistance Center
62) Which of the following law’s regulation affects companies with more than 15 employees?
A) The Fair Labor Act
B) The Americans with Disabilities Act (ADA)
C) The Family and Medical Leave Act
D) The Civil Rights Activities Act
63) The Americans with Disabilities Act includes all of the following EXCEPT
A) providing accessibility to people with physical disabilities.
B) preventing dismissal of employees with disabilities.
C) testing people with disabilities.
D) managing people with disabilities.
64) The legal means to protect intellectual property is ________.
A) copyright
B) trademark
C) patent
D) all of these
65) A ________ is a claim of intellectual property that covers a specific invention.
A) copyright
B) trademark
C) patent
D) watermark
66) A ________ is a claim of intellectual property that is associated with a specific business.
A) copyright
B) trademark
C) patent
D) watermark
67) Which of the following items is an example of things that can be trademarked?
A) The name of the firm
B) A symbol representing the firm
C) The names of the firm’s products
D) All of these
68) In the United States, where must a patent application be filed?
A) The United States Invention Office
B) The United States Patent and Trademark Office
C) The American Patent and Trademark Office
D) The Patent and Copyright Office
69) Which type(s) of patents is issued by the United States Patent and Trademark Office?
A) Physical invention and process patents
B) Physical invention only
C) Process patents only
D) None of these
70) ________ is a type of insurance in which a business is covered if the workers cause any
damage to the performance of the work.
A) Bonding
B) Workers’ compensation
C) Limited liability
D) Unlimited liability
71) ________ insurance covers liability for workers who are injured on the job.
A) Bonding
B) Workers’ compensation
C) Limited liability
D) Unlimited liability
72) A board of advisors should have both ________ and ________ to assist small business owners.
A) money; legal experience
B) insight; experience
C) money; insight
D) insight; legal experience
73) A ________ is a group formed at the discretion of the founders and composed of individuals
outside the small business that advise the firm.
A) board of owners
B) board of trustees
C) board of employees
D) board of advisors
74) A business that chooses to form a corporation is legally required to have a ________.
A) board of owners
B) board of directors
C) board of employees
D) board of advisors
75) What is the major difference between a board of directors and a board of advisors?
A) A board of directors always direct large companies, whereas a board of advisors are usually
found in small firms.
B) A boards of directors are individuals from outside the firm, whereas a board of advisors are
individuals from inside the firm.
C) A board of directors have fiduciary responsibility, whereas a board of advisors advise the firm.
D) There is no difference between the two.
76) A ________ proprietorship is where a person who owns it and the business are treated as one
for legal purposes.
77) A ________ is a business formed between two or more individuals directly.
78) A ________ is an agreement between two parties to perform certain activities for some
considerations.
79) A(n) ________ is the legal means to protect intellectual property such as books or other printed
materials.
80) A ________ is a claim of intellectual property that covers a specific invention.
81) A ________ is a claim of intellectual property that is associated with a specific business’s name
or logo.
82) In an organization, a(n) ________ is a group formed at the discretion of the founders and
composed of individuals outside the business who advise the founders.
83) Explain the advantages and disadvantages of a sole proprietorship.
84) Briefly describe the types of partners involved in a limited liability partnership.
85) Describe the advantages and disadvantages of a general partnership.
86) Describe the four benefits of a Subchapter S Corporation.
87) In the context of legal business entities, briefly describe a Subchapter C Corporation and
identify one of its important features.
88) List and describe the required elements of a legal contract.
89) Describe a few issues that a new business owner needs to consider in leasing.
90) Explain the difference between copyright, trademark, and patent.