Q. In which business structure do owners have the most control over operations?
-
A.
Sole proprietorship
-
B.
Partnership
-
C.
Corporation
-
D.
Limited liability company
Solution
A sole proprietorship allows the owner complete control over all business decisions and operations.
Correct Answer:
A
— Sole proprietorship
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Q. What is a common reason for choosing a corporation as a business structure?
-
A.
Simplicity in management
-
B.
Limited liability for owners
-
C.
Easier to dissolve
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D.
Direct taxation
Solution
One of the main reasons for choosing a corporation is the limited liability it offers to its shareholders.
Correct Answer:
B
— Limited liability for owners
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Q. What is a primary benefit of forming a limited liability company (LLC)?
-
A.
Unlimited liability protection
-
B.
Tax flexibility
-
C.
Complex management structure
-
D.
No formalities required
Solution
An LLC provides limited liability protection to its owners, shielding their personal assets from business debts.
Correct Answer:
B
— Tax flexibility
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Q. What is a significant benefit of a cooperative?
-
A.
Profit maximization
-
B.
Member control
-
C.
Limited liability
-
D.
Tax advantages
Solution
Cooperatives are controlled by their members, allowing for democratic decision-making.
Correct Answer:
B
— Member control
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Q. Which business ownership form is most likely to have a complex structure and regulatory requirements?
-
A.
Sole proprietorship
-
B.
Partnership
-
C.
Corporation
-
D.
Cooperative
Solution
Corporations have a complex structure and must comply with various regulatory requirements.
Correct Answer:
C
— Corporation
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Q. Which business ownership form is most suitable for family-run businesses?
-
A.
Sole proprietorship
-
B.
Partnership
-
C.
Corporation
-
D.
Franchise
Solution
Partnerships are often suitable for family-run businesses as they allow family members to share responsibilities and profits.
Correct Answer:
B
— Partnership
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Q. Which business structure is best for raising large amounts of capital?
-
A.
Sole proprietorship
-
B.
Partnership
-
C.
Corporation
-
D.
Limited liability company
Solution
Corporations can issue stocks to raise capital, making them ideal for attracting large investments.
Correct Answer:
C
— Corporation
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Q. Which form of business ownership allows for shared profits and losses?
-
A.
Sole proprietorship
-
B.
Partnership
-
C.
Corporation
-
D.
Franchise
Solution
In a partnership, profits and losses are shared among partners according to their agreement.
Correct Answer:
B
— Partnership
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Q. Which form of business ownership is characterized by a franchise agreement?
-
A.
Sole proprietorship
-
B.
Partnership
-
C.
Corporation
-
D.
Franchise
Solution
A franchise is a type of business ownership where an individual operates a business under the brand and system of a larger company.
Correct Answer:
D
— Franchise
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Q. Which form of business ownership is typically the easiest to dissolve?
-
A.
Sole proprietorship
-
B.
Partnership
-
C.
Corporation
-
D.
Limited liability company
Solution
A sole proprietorship can be easily dissolved as it is tied directly to the owner.
Correct Answer:
A
— Sole proprietorship
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