Business Structures Answers
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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.2
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Which can be considered disadvantages of sole proprietorships and partnerships?
A
Partnerships require many people to write a charter, while sole proprietorships require one person to write a charter.B
Sole proprietorships require one person to know complicated tax laws, while partnerships require many people to know the rules.C
Partnerships require one person to do many things, while sole proprietorships require many people to weigh in on decisions.D
Sole proprietorships require one person to do many things, while partnerships require many people to weigh in on decisions.3
The main advantage that corporations have is
A
limiting liability for owners and stockholders.B
giving many owners a say in business decisions.C
being inexpensive and easy to establish.D
requiring fewer state and federal regulations.4
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.5
Which document determines the number of shares in a company?
A
a stock prospectusB
an annual bill of rightsC
a corporate charterD
an annual report6
Cooperatives save members money by
A
purchasing supplies and services as a group.B
securing financing from banks as a group.C
charging more to sell their products as a group.D
sharing all profits democratically as a group.7
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.8
Analyze the chart, which depicts a typical corporate structure.
A
run the business by electing a board of directors, who then hire the company’s leaders.B
run the business by electing a board of directors and hiring a president and other leaders.C
make business decisions on the advice of a board of directors, a president, and other leaders.D
make business decisions on the advice of a board of directors, who follow the expertise of leaders.9
The most common business organizations in the United States are
A
partnerships.B
sole proprietorships.C
corporations.D
franchises.10
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.Did you find these answers helpful?
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