Question 1

Under a business format franchise, the franchisees pay royalties for the right to sell the product of the franchisor, but otherwise they have complete freedom as to how they manage their businesses.

Accepted Answer

A) True 
 B)False

Question 2

Sole proprietorships generally have a distinct advantage over other forms of business ownership when it comes to raising large sums of financial resources.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is a disadvantage of a sole proprietorship?

Accepted Answer

A)   It is hard to attract and retain talented employees.
B)   It is expensive and difficult to set up this type of business.
C)   It is heavily regulated by most provincial and local governments.
D)   There is limited liability.E) C) and D)
F) A) and B)

Question 4

Basil Pappas spent his youth working in the restaurants of several of his close relatives. Now, he wants to venture into his own business and has decided that he will open his own restaurant. Basil needs more money than he can come up with on his own, so he plans to ask his two brothers to put up some money in exchange for a share of ownership. Such an arrangement means that the company CANNOT be formed as which of the following?

Accepted Answer

A)   general partnership
B)   corporation
C)   limited partnership
D)   sole proprietorshipE) None of the above
F) B) and C)

Question 5

Compared to a sole proprietorship, what would be a major advantage of a general partnership?

Accepted Answer

A)   It is considered to be a permanent business organization.
B)   It would be able to completely avoid the problem associated with unlimited liability.
C)   It would be able to take advantage of complementary skills and shared workload.
D)   It is easier and less expensive to form.E) C) and D)
F) A) and B)

Exam 5: Business Formation: Choosing the Form That Fits

Sole proprietorships generally have a distinct advantage over other forms of business ownership when it comes to raising large sums of financial resources.

Correct Answer
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Under a business format franchise, the franchisees pay royalties for the right to sell the product of the franchisor, but otherwise they have complete freedom as to how they manage their businesses.

Correct Answer
verified

Which of the following is a disadvantage of a sole proprietorship?

Correct Answer
verified

Correct Answer
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Compared to a sole proprietorship, what would be a major advantage of a general partnership?

Correct Answer
verified

Exam 5: Business Formation: Choosing the Form That Fits

Sole proprietorships generally have a distinct advantage over other forms of business ownership when it comes to raising large sums of financial resources.

Correct AnswerverifiedShow Answer

Under a business format franchise, the franchisees pay royalties for the right to sell the product of the franchisor, but otherwise they have complete freedom as to how they manage their businesses.

Correct AnswerverifiedShow Answer

Which of the following is a disadvantage of a sole proprietorship?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Compared to a sole proprietorship, what would be a major advantage of a general partnership?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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