Which of the following statements pertain to a joint venture and not to a partnership business arrangement? 1. It has a limited purpose II. It is a business relationship between several entities III. Involves the sharing of gross returns rather than profits IV. Each person or entity involved is liable only for an agreed-upon portion of the liabilities V. Allows for the right of each person or entity involved to dispose of any interest in the property subject to the agreement II and III only I, II, III, IV and V I, III, IV and V only I and II only 8 A franchisee may feel constrained by the franchisor's operating polices. Why might this disadvantage to the franchisee be considered an advantage to the lender? The franchisee: Must follow a proven operating procedure May rely on a proven product instead of developing good management skills Will be able to dedicate more of his/her time to marketing Must hire experts to manage the franchise's finances 9 Which of the following statements about business structures is not true? Joint venture allows for sharing of risks with a venture partner In a limited liability corporation, profit distributions flow through to the members In a sole proprietorship, the owner retains all of the after-tax profits of the business In a general partnership, partners are only liable for the portion of capital they invested in the business 10 Which of the following statements about corporations is accurate? Rev There is no restriction on the shareholders' right to transfer shares within a private company The shares of private companies are offered to the general public through a stock exchange Public companies may be limited to a certain number of shareholders depending on the jurisdictions A professional corporation does not limit the professional's personal liability for claims against his or her professional capacity