5 Written Questions

1. how big? how much profit?
2. Revised Uniform Partnership Act: to settle problems between partners if no partnership agreement is written
3. aka articles of partnership, a document that states all of the terms of operating the partnership for the protection of each partner involved
4. allows the franchisee to buy products from the franchiser (supplier) or to license the use of its trade name. connects a single manufacturer with many dealers. idea is to make products available to consumers in a specific geographic region through exclusive dealers
5. those who take an active role in managing a company and who share in its rewards, liabilities, and responsibilities

5 Matching Questions

1. Disadvantages of corporations
2. consider start-up and future capital requirements
3. consider management succession plans
4. silent partner
5. a corporation can sell its stock to

1. a how to raise start-up capital
2. b (private placement) private investors, and (public offering) the public
3. c a limited partner that is not active but generally known to be a member of the partnership
4. d how will the business be passed on?
5. e cost and time involved in the incorporation process, double taxation, potential for diminished managerial incentives, legal requirements and regulatory red tape, potential loss of control by founders

5 Multiple Choice Questions

1. you may lack skill or ability and will need to choose a form accordingly (do you need a partner?)
   1. consider business goals
   2. consider liability exposure
   3. consider managerial ability
   4. consider control
2. may need to relinquish as an entrepreneur
   1. silent partner
   2. consider business goals
   3. consider control
   4. Consider taxes
3. all partners are limited partners, only limited liability for debts and obligations, pay personal taxes on their shares
   1. Limited Liability Company (LLC)
   2. to keep limited partnership status
   3. Limited liability partnership (LLP)
   4. Master limited partnership (MLP)
4. financial investors who do not want to participate in the day to day affairs of the partnership and seek to limit their risk
   1. limited partners
   2. consider control
   3. Consider taxes
   4. silent partner
5. formed in one state but conducts business in another state
   1. S Corporation
   2. alien corporation
   3. domestic corporation
   4. foreign corporation

5 True/False Questions

1. closely held corporation → have a large number of shareholders, and stock is usually traded on one of large stock exchanges

   True        False

2. exclusive territory → financial investors who do not want to participate in the day to day affairs of the partnership and seek to limit their risk

   True        False

3. Most complex form of business → sole proprietorship

   True        False

4. most common form of ownership → corporation

   True        False

5. S Corporation → limited-liability protection of a corporation while allowing tax advantage of a partnership, strict qualifications

   True        False