Chap019 - Chapter 019 : Business Organizations Chapter 019...

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Chapter 019 : Business Organizations Chapter 019 : Business Organizations Student: ___________________________________________________________________________ 1. There is only one organizational form that is available for a business structure. BT: Knowledge PO: 1 True False 2. Businesses are generally structured as one of the following: (1) sole proprietorship, (2) partnership, (3) corporation, or (4) limited liability company. BT: Knowledge PO: 1 True False 3. An advantage to a sole proprietorship is that the owner has complete authority, within the boundaries of the law, for the running of the business. BT: Knowledge PO: 2 True False 4. The major disadvantage of a sole proprietorship is the fact that the owner of the establishment has limited liability. BT: Knowledge PO: 2 True False 5. Dissolution of a partnership is governed by the partnership contract and usually occurs due to the retirement of one of the partners. BT: Knowledge PO: 3 True False
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6. When individuals become partners for only a short period of time, or for only a single project, they are engaged in a joint venture. BT: Knowledge PO: 3 True False 7. When a partner acts with either actual or apparent authority, all other partners are not liable for his or her acts. BT: Knowledge PO: 3 True False 8. Corporations are owned by shareholders, who purchase shares of stock in the corporation. BT: Knowledge PO: 4 True False 9. A corporation drafts articles of incorporation that lists the liabilities of the company. BT: Knowledge PO: 4 True False 10. The major advantage of a corporation is the fact that the shareholders have unlimited liability. BT: Knowledge PO: 4 True False 11. The major disadvantage of a corporation is the fact that the corporation is required to pay separate income taxes at a special corporate rate for any year during which a profit is earned. BT: Knowledge PO: 4 True False
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12. The duty of loyalty means that a director has no legal or ethical obligation to administer to the affairs of the corporation with personal integrity, honesty, and candor. BT: Knowledge PO: 4 True False 13. The duty of care means that a director has a legal and ethical obligation to act diligently and prudently in conducting the affairs of the corporation. BT: Knowledge PO: 4 True False 14. The limited liability companies provide all of the owners with limited liability, while allowing them to participate in the management of the business. BT: Knowledge PO: 5 True False 15. Organizations that are referred to as not-for-profits and can include charitable organizations but not organizations such as universities, political parties, labor union, social clubs, and others. BT: Knowledge
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This note was uploaded on 09/25/2011 for the course GENB 4350 taught by Professor Louis during the Spring '11 term at Houston Baptist.

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Chap019 - Chapter 019 : Business Organizations Chapter 019...

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