1. A corporation pays income taxes on its own income, and its shareholders generally must pay income taxes on dividends from the corporation. True or False.

2. The ____ form of a business organization most limits personal liability for its shareholders. A: sole proprietorship B: Cooperative society C: corporation D: general partnership

3. William and Nigel decide to start a partnership business. They ask their friend Sophia to become a limited partner in order to help them with additional funds to get the business started. Which of the following statements about Sophia would be correct if she becomes and remains a limited partner in this scenario?

A.	She may be involved in management of the business but to a rather limited degree.

B.	She cannot be entitled to any share in the profits of the business.

C.	She may lose her investment if the business fails, but she will have no personal liability for partnership debts.

D.	She may be considered an employee and therefore will be entitled to wages for the services she renders to the partnership.

4. Partnerships:

A.	are not required to pay corporate franchise taxes.

B.	need to pay privilege taxes to do intrastate business in another state.

C.	are taxed on their operations at the same level as corporations.

D.	cannot save income tax even if losses are anticipated in the early years of business.

5. No express agreement is needed to create a partnership. True or False.

6. A partnership requires that the property used in the business be owned by the partnership or in equal shares by the partners. True or False.

7. A partner's ownership of partnership property is called a partnership interest. True or False.