cannot be amended once adopted.
define the name by which the firm will operate.
describe the intended life and purpose of the organization.
determine how a corporation regulates itself.
References
Multiple Choice Learning Objective:
01-03 Articulate the
financial implications
of the different forms
of business
organization.
Difficulty: 1 Basic Section: 1.2
Corporate Finance
and the Financial
Manager
31.
Award: 10.00 points
A limited liability company:
can only have a single owner.
is comprised of limited partners only.
is taxed similarly to a partnership.
is taxed similarly to a C corporation.
generates totally tax-free income.
References
Multiple Choice Learning Objective:
01-03 Articulate the
financial implications
of the different forms
of business
organization.
Difficulty: 1 Basic Section: 1.2
Corporate Finance
and the Financial
Manager
32.
Award: 10.00 points
Which form of business would be the best choice if it were necessary to raise large amounts of
capital?
Sole proprietorship
Limited liability company
Corporation
General partnership
Limited partnership
References
Multiple Choice Learning Objective:
01-03 Articulate the
financial implications
of the different forms
of business
organization.
Difficulty: 2
Intermediate
Section: 1.2
Corporate Finance
and the Financial
Manager
33.
Award: 10.00 points
A ______ has all the respective rights and privileges of a legal person.
sole proprietorship
general partnership
limited partnership
corporation
limited liability company
References
Multiple Choice Learning Objective:
01-03 Articulate the
financial implications
of the different forms
of business
organization.
Difficulty: 1 Basic Section: 1.2
Corporate Finance
and the Financial
Manager
34.
Award: 10.00 points
Abigail, Blake and Camila plan to launch a business. Abigail will fund the venture but wants to limit
her liability to her initial investment. She has no interest in the daily operations. Blake will contribute
his full efforts on a daily basis but has limited funds to invest in the business. Camila will be involved
as a consultant and manager and will also contribute funds. Blake and Camila are willing to accept
liability for the firm's debts as they feel they have nothing to lose by doing so. All three individuals
will share in the firm's profits and wish to minimize the initial costs of organizing the business. Which
form of business entity should these individuals adopt?
Sole proprietorship
Joint stock company
Limited partnership
General partnership
Corporation
References
Multiple Choice Learning Objective:
01-03 Articulate the
financial implications
of the different forms
of business
organization.
Difficulty: 2
Intermediate
Section: 1.2
Corporate Finance
and the Financial
Manager
35.
Award: 10.00 points
Marissa and Raj are equal general partners in a business. They are content with their current
management and tax situation but are uncomfortable with the idea of unlimited liability. If they wish
to remain as the only two owners of the business, which form of business entity should they
consider to replace their current arrangement?
Sole proprietorship
Joint stock company
Limited partnership
Limited liability company
Corporation
References
Multiple Choice Learning Objective:
01-03 Articulate the
financial implications
of the different forms
of business
organization.
Difficulty: 2
Intermediate
Section: 1.2
Corporate Finance
and the Financial
Manager
36.
Award: 10.00 points
The growth of both sole proprietorships and partnerships is frequently limited by the firm's:
double taxation.
bylaws.
inability to raise cash.
limited liability.
agency problems.
References
Multiple Choice Learning Objective:
01-03 Articulate the
financial implications
of the different forms
of business
organization.
Difficulty: 2
Intermediate
Section: 1.2
Corporate Finance
and the Financial
Manager
37.
Award: 10.00 points