Q. In which form of business ownership do owners have limited control over management?
-
A.
Sole proprietorship
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B.
General partnership
-
C.
Limited partnership
-
D.
Corporation
Solution
In a corporation, shareholders have limited control over day-to-day management, which is handled by a board of directors.
Correct Answer:
D
— Corporation
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Q. What is a key advantage of a partnership?
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A.
Unlimited liability
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B.
Shared decision-making
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C.
Limited resources
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D.
Complex tax structure
Solution
In a partnership, decision-making is shared among partners, which can lead to more diverse ideas and solutions.
Correct Answer:
B
— Shared decision-making
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Q. What is a primary feature of a cooperative?
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A.
Profit maximization
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B.
Member ownership
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C.
Limited liability
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D.
Centralized management
Solution
Cooperatives are owned and operated by their members, who share in the profits and decision-making.
Correct Answer:
B
— Member ownership
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Q. What is the main purpose of forming a limited liability partnership (LLP)?
-
A.
To avoid double taxation
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B.
To limit personal liability
-
C.
To simplify management
-
D.
To increase ownership control
Solution
The primary purpose of an LLP is to provide limited liability protection to its partners while allowing them to participate in management.
Correct Answer:
B
— To limit personal liability
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Q. What is the primary purpose of forming a corporation?
-
A.
To simplify tax reporting
-
B.
To limit personal liability
-
C.
To increase personal control
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D.
To ensure unlimited lifespan
Solution
The primary purpose of forming a corporation is to limit the personal liability of its owners.
Correct Answer:
B
— To limit personal liability
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Q. Which business structure is most suitable for a family-owned business?
-
A.
Sole proprietorship
-
B.
Corporation
-
C.
Limited liability company (LLC)
-
D.
Franchise
Solution
An LLC is often suitable for family-owned businesses as it provides flexibility in management and limited liability protection.
Correct Answer:
C
— Limited liability company (LLC)
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Q. Which business structure is typically easier to raise capital?
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A.
Sole proprietorship
-
B.
Partnership
-
C.
Corporation
-
D.
Cooperative
Solution
Corporations can issue stocks to raise capital, making it easier to attract investors compared to other business structures.
Correct Answer:
C
— Corporation
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Q. Which form of business ownership limits the liability of its owners?
-
A.
Sole proprietorship
-
B.
General partnership
-
C.
Limited liability company (LLC)
-
D.
Corporation
Solution
Both LLCs and corporations limit the liability of their owners, protecting personal assets from business debts.
Correct Answer:
C
— Limited liability company (LLC)
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Q. Which of the following is a characteristic of a sole proprietorship?
-
A.
Limited liability
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B.
Single ownership
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C.
Double taxation
-
D.
Complex structure
Solution
A sole proprietorship is owned and operated by a single individual, making single ownership its defining characteristic.
Correct Answer:
B
— Single ownership
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Q. Which of the following is NOT a type of business ownership?
-
A.
Sole proprietorship
-
B.
Partnership
-
C.
Franchise
-
D.
Limited liability partnership
Solution
While franchises are a method of distributing goods and services, they are not a standalone form of business ownership.
Correct Answer:
C
— Franchise
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