Indicate whether each of the following statements is true or false by writing T or F in the answer column.
1. The great majority of small businesses in the United States are organized as limited liability companies. 1. ___________
2. The major disadvantage of a sole proprietorship is the fact that the owner of the establishment has unlimited liability. 2. ___________
3. A disadvantage of a sole proprietorship is the difficulty the owner faces in raising money to finance the operations of the business. 3. ___________
4. In a partnership, the shares of the partners might be equal or they might vary according to an agreement between or among the partners. 4. ___________
5. In a partnership, it is necessary that profits and losses be shared in the same percentages.
5. ___________
6. In a partnership, the expulsion of one of the partners must always be for cause. 6. ___________
7. During the winding- up period, there is an orderly liquidation of the partnership assets.
7. ___________
8. While a partnership itself does not pay federal income taxes, it does complete an informational tax return. 8. ___________
9. Each partner is an agent for all other partners. 9. ___________
10. A limited partner is allowed to participate in the overall management of the business, and at the same time maintain limited liability. 10. ___________
11. Courts have granted corporations similar constitutional rights to those granted to individuals. 11. ___________
12. A corporation usually has bylaws, which provide rules for the meetings of the corporation. 12. ___________
13. Corporations may freely give both charitable contributions and political contributions.
13. ___________
14. Corporations continue to live on unless some formal action is taken to discontinue the business. 14. ___________
15. The shareholders who own the corporation directly manage the activities of the firm.
15. ___________