BLW1005 QUIZ: BUSINESS ORGANIZATIONS

No Explanation Needed!

1) In a Sole Proprietorship all of the profits and losses are the owners. True or False?

2) A formal written agreement is required in order to form an effective partnership. True or False?

3) In a general partnership, each partner is personally liable for any losses suffered by the partnership business, even if the losses exceed the partner's contribution to the partnership. True or False?

4) In a limited partnership, both the general partners and limited partners have personal liability exposure for all losses of the partnership. True or False?

5) A corporation's shareholder's are not typically personally liable for the debts, losses, or exposures of the corporation. True or False?

6) Partnership Capital is the total money and property contributed by the partners to be used by the partnership. True or False?

7) Partners do not owe each other any duties or responsibilities with respect to how they conduct their partnership business. True or False?

8) All partners are automatically entitled to wages for the time they spend working on partnership business. True or False?

9) A partner's liability in a general partnership is joint and several, meaning that if a creditor sues the partnership for a debt, that creditor can collect all of his/her losses from all of the partners or from only those partners that have personal funds to pay the creditor. True or False?

10) Corporations allow people (investors) to invest money into a business without worrying about the liability exposure of the corporation or the need to engage in the management of the day to day aspects of the business. True or False?

11) Only 11 states offer the right to incorporate. True or False?

12) In order to create a corporation, the corporation must draft an Articles of Incorporation. True or False?

13) It is typically easier and less expensive to form a corporation than it is a sole proprietorship. True or False?

14) Corporations that are under-capitalized fund the risk of allowing creditors to pierce the corporate veil and sue the shareholders personally. True or False?

15) All shareholders are permitted to make decisions on the day to day operations of a corporation. True or False?

16) Shareholders are responsible for electing the Board of Directors and amending the articles of incorporation. True or False?

17) Board members of a corporation can individually act as agents of the corporation and have the authority to bind the corporation to decisions they have made individually. True or False?

18) The term of office for members of the Board of Directors can be staggered. True or False?

19) Corporations can raise capital by selling shares or by issuing debt securities. True or False?

20) Federal security laws are designed to ensure that investors do not make bad decisions with their investments. True or False?