Shareholders are provided with a prospectus to help them know the financial situation of a corporation. True False

All of the following are reasons the secretary of state may bring a quo warranto action except Formed fraudulent business Failure to pay taxes Failure to file annual reports Not paying dividends when there was no profit

Becoming a franchisee is a common way to start a business without a large amount of money needed. True False

A sole proprietorship pays individual income tax and business income tax. True False

A franchisee has no control/say over all of the following except Brand recognition Advertising Products they sell Who they hired

A corporation is managed by directors who are all the shareholders. True False

Joan and Bob asked George to help them get a contract with another company who is a big supplier for them. George helped them because he knew the president of the company and led the president to believe that he was a partner. If Joan and Bob do not make payment, George would be held liable for the bill based on partnership by estoppel. True False

There are two steps to forming a corporation: Choosing a Name and Filing an Articles of Incorporation. True False

A company name can be the person's name or it can any fictitious name that they want to use. True False

Which is not a part of the Articles of Partnership? Number of employees Planned duration of business Parties to the agreement Provisions regarding sales, withdrawals and profits

All of the following are reasons a partnership could be dissovlvd except Voluntary withdrawal Partner gets married Dissolved by Court Partner dies

All are rights of someone who owns preferred stock except Right to Vote on company business No liability beyond share value Receive dividends before common stockholders Fixed dividends

Mark all shareholders rights (Check all that apply) Right to receive corporate financial statements Right to be sued by others Right to Receive Dividends Right to transfer shares of stock Right to buy materials for the business

When you enter into a franchise agreement, you are paying for the name but have the freedom to do what you want with advertising. True False

The royalty fee is a one-time fee that a franchisee pays to buy part of the business and open a franchise. True False

A corporation allows shareholders to all receive same amount of profits called dividends. True False

There are many owners in a corporation known as shareholders. True False

Mark all that are advantages to buying a franchise. (Check all that apply) Choice in packaging Connection to company who has something go wrong Supervision and consulting Financial assistance Limited resources needed

Tenancy in partnership stipulates all of the following except: Partners can not sell their share in the business without permission. Ue property for other purpose without partners permission Personal creditors of a partner can not take property/assets from the business. Can will the share in business to family when they die

Shareholders get to vote on the following with the exception of Ammending of by-laws Who board members will be Allowing a merger to occur Amount they will receive in dividends

An advantage of starting a franchise is that you automatically get brand recognition and you get to pick the location where you want to open your franchise business. True False

If a corporation goes bankrupt, the most a shareholder loses is the amount of money spent to buy stock. True False

What is it called when the business owner is responsible for all losses experienced by the business? Limited Human Resources Unlimited Liability Limited Lifetime Limited Capital

The purpose of asset acquisition is so that the selling company can get money to help pay debts. True False

Stock acquisition is when a company buys back all of the stock from the shareholders. True False

Merger is when two or more companies join to form a new company. True False

A person may share profit but not be able to claim partnership for all of the following reasons except: Partner paid money to start business Annuity to widow of partner Repayment of Debt Paid interest on loan

All are reasons a franchisor could cancel a franchise agreement except Defrauding the company Franchisee has low sales revenue Brand name is being damaged Franchisee declares bankruptcy

A franchisee cannot have his/her franchise agreement terminated by the franchisor because they did not follow standard packaging. True False

Two common ways a corporation expands is through mergers and acquisitions. True False

Which is not a disadvantage of a sole proprietorship? Limited Human Resources Limited Lifetime Unlimited Capital Unlimited liability

You entered a registered limited liability partnership; you are protected from all actions performed by your partner except Misconduct by one partner Ordered business materials by one partner Negligence of one partner Wrongful Acts of one partner

Which is not an advantage of a sole proprietorship? Ease of Creation Keep all profits Total Control Excessive Government Control

Ted ran up $500,000 in debt under the business's name. Bob is Ted's general partner. But Bob is not responsible for the debt that Ted incurred. True False

Mark all disadvantages to a corporation (Check all that apply) Unlimited business life Orginial owner loses control of the business Shareholder's liability limited to money paid for shares Income may be taxed more than once Extensive Government Regulations

A franchisor offers the opportunity to people to become franchisees because they do not want to have to worry about their reputation across the country. True False

A sole proprietorship is the hardest type of company to open. True False

A corporation is business authorized by the court to act as a single person. True False