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Business Structures Answers

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1
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What happens to earnings in a cooperative?

A
They are used to pay middlemen for services.
B
They are shared with member owners.
C
They are used to buy more stock for members.
D
They are shared with customers through dividends.
2
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What role does a fast-food corporation play when it agrees to franchise its business? Select four answers.

A
supply training
B
license a trademark
C
select a location
D
pay associated fees
E
supply advertising
F
collect most profits
3

Franchising is typically done by

A
cooperatives.
B
partnerships.
C
LLC
D
corporations.
4

Entrepreneurs who want to open a franchise

A
buys the rights from the parent company and creates his or her own rules.
B
buy the rights from the parent company and invest in a location approved by the parent company.
C
invest in a location and create a business model for the franchise.
D
invest in a location and develop a trademark for the franchise.
5

Which document determines the number of shares in a company?

A
a stock prospectus
B
an annual bill of rights
C
a corporate charter
D
an annual report
6

The most common business organizations in the United States are

A
partnerships.
B
sole proprietorships.
C
corporations.
D
franchises.
7

How do corporations raise money and resources to expand? Select THREE answers.

A
They request a bank loan.
B
They raise franchise fees.
C
They cash in dividends.
D
They agree to sell stocks.
E
They issue bonds.
8

A disadvantage of forming a partnership is that owners

A
can find it tougher to start and stop a business.
B
can find it more difficult to get a bank loan.
C
are only responsible for their own finances.
D
are fully responsible for their partners' losses.
9

Franchises are attractive to business owners because

A
they have a proven business model.
B
they are typically inexpensive to buy.
C
they get to keep all profits.
D
they come with very little risk.
10

[BLANK]

A
fees
B
taxes
C
insurance
D
interest

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