1.

A sole trader:

(a)

Must operate under a registered business name

.

(b)

Can collect all profits of the business as their personal income

.

(c)

Has limited liability

.

(d)

All of the above

.

2.

Partnerships are regulated by:

(a)

Legislation

.

(b)

Legislation and common law

.

(c)

Legislation, common law and equity

.

(d)

Legislation and equity

.

3.

A partnership is bound when a partner acts within:

(a)

Actual authority or apparent authority

.

(b)

Actual authority or obvious authority

.

(c)

Authentic authority or apparent authority

.

(d)

Authentic authority or obvious authority

.

4.

An incorporated association and a company are both:

(a)

Separate legal entities

.

(b)

Formed under the

Corporations Act 2001

(Cwlth)

.

(c)

Structures which provide for profit sharing by members

.

(d)

Structures which can be public or proprietary

.

5.

A company must be registered with:

(a)

The Australian Competition and Consumer Commission

.

(b)

The Australian Securities and Investment Commission

.

(c)

The Australian Corporate Bodies Commission

.

(d)

The Australian Financial Institutions Commission

.

6.

Which of the following is a public company?

(a)

Mortenby and Co Pty Ltd

.

(b)

Public and Mutual Pty Ltd

.

(c)

Chemicalswill Cola Ltd

.

(d)

Microapel Pty Ltd

.

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Chapter 3:

Choosing a Business Structure

7.

A proprietary company:

(a)

Cannot raise funds from the public

.

(b)

Cannot raise funds from the public unless they do so by prospectus

.

(c)

Cannot raise funds from the public unless all directors agree

.

(d)

Cannot raise funds from the public if the company can meet its debts any other way

.

8.

A trust created by the intentional act of the settlor using a written or spoken instrument is:

(a)

A constructive trust

.

(b)

An implied trust

.

(c)

A resulting trust

.

(d)

An express trust

.

9.

The trustee is the legal owner of the trust property and therefore:

(a)

May use the trust property however they wish, including for their own benefit

.

(b)

Must use the trust property for the best interests of the beneficiary

.

(c)

Must use at least some of the trust property for the best interests of the beneficiary

.

(d)

May use the trust property however they wish including for their own benefit, as long as the

beneficiary is kept informed

.

10.

A trust will terminate when:

(a)

The trustee loses interest

.

(b)

The trust has concluded

.

(c)

The trustee dies, retires or is removed

.

(d)

(b) and (c)

.

11.

Which of the following statements is true about a franchise?

(a)

A franchise is a form of business structure

.

(b)

A franchisee will always have limited liability

.

(c)

A franchise is a license to operate a business

.

(d)

A franchise or will always dictate the business structure of the franchisee

.

12.

Which of the following statements is true about a company?

(a)

The law regards the company as an artificial legal person

.

(b)

The directors of the company decide whether the company should have the legal power to sue or be sued

.

(c)

The shareholders decide whether the company should have the legal power to enter into contracts

.

(d)

All of the above

.

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13.

Which of the following statements is false about an incorporated association?

(a)

It can enter into contracts in its own name

.

(b)

The legal liability of its members is limited to a sum which is three times their membership fees

.

(c)

It can own property in its own name

.

(d)

It can sue or be sued

.

14.

A company director is not normally liable for the debts of the company because of the

(a)

Corporate fence

.

(b)

Corporate force field

.

(c)

Corporate screen

.

(d)

Corporate veil

.

15.

Which of the following are advantages of a limited liability company?

(a)

The shareholders of the company are not personally liable for the debts of the company

.

(b)

The ability to raise capital

.

(c)

The company itself can enter into contracts

.

(d)

All of the above

.