Question 1

As defined in the text, a form of business with a single owner who has unlimited liability, controls all decisions, and receives all profits is known as a(n)  __________.

Accepted Answer

A)   proprietorship
B)   partnership
C)   closely held corporation
D)   public corporation
E)   None of the answers apply.F) B) and E)
G) B) and D)

Question 2

Some entrepreneurs see the process of building a board of advisers as being overwhelming. After all, they may be just starting their business or spending all their time managing their enterprise. If this is the case and they forgo a board, they should consider enlisting the support of a _________________.

Accepted Answer

A)   different family members
B)   loyal employees who are willing to work for less than the going rate
C)   family members
D)   mentor
E)   All of the answers are correct.F) A) and B)
G) A) and C)

Question 3

With regards to corporate boards of directors, the purpose of new legislation passed by the Ontario Securities Commission and the Canadian Dealers Association is to __________.

Accepted Answer

A)   restrict board activities to corporate governance issues only
B)   establish more independent functioning boards
C)   remove limits on liabilities of shareholders if they are involved in illegal practices
D)   restrict board membership to only those who have a vested interest in the success of the company
E)   All of the answers are correct.F) All of the above
G) A) and B)

Question 4

In a sole proprietorship, __________.

Accepted Answer

A)   there are strict time limits on how long they may exist, which vary by province
B)   profitability is the only determinant of longevity
C)   the death of the owner results in the termination of the business
D)   the business can be carried on only by the owner's children or spouse
E)   None of the answers apply.F) All of the above
G) D) and E)

Question 5

To contain or limit liability within a partnership, the company will __________.

Accepted Answer

A)   ask each partner to contribute more than they need to operate the company and set it aside just in case
B)   designate some partners as being more liable than others, in exchange for a greater share of the profits
C)   set up an income trust to act as a contingency fund against potential lawsuits
D)   buy insurance against liability suits
E)   None of the answers apply.F) C) and D)
G) A) and E)

Question 6

When attempting to build a successful organizational culture, it is important for the entrepreneur to remember that __________.

Accepted Answer

A)   it is easier to change a person's attitude than their behaviour
B)   nobody works as hard as the owner
C)   it is easier to change a person's behaviour than their attitude
D)   the more that you ask from someone, the more you will get
E)   None of the answers apply.F) C) and D)
G) B) and E)

Question 7

In terms of management control, in a partnership, __________.

Accepted Answer

A)   democracy rules as every partner participates in decision making
B)   the senior partners have the most decision making authority
C)   only the managing partner can break a decision deadlock
D)   majority rules unless otherwise specified in a partnership agreement
E)   None of the answers apply.F) A) and B)
G) A) and D)

Question 8

Which of the following is not one of the criteria used by entrepreneurs when evaluating the different organizational structures for the new venture?

Accepted Answer

A)   liability of owner(s) 
B)   management control
C)   transferability of interests
D)   organizational culture
E)   capital requirementsF) C) and D)
G) A) and B)

Question 9

As shown in the Opening Profile, building an organization often takes not only commitment and dedication by the founder and/or CEO but also finding the right people to serve on the company's management team and then giving them the freedom to make decisions.

Accepted Answer

A) True 
 B)False

Question 10

In Canada, a corporation can be created only by __________.

Accepted Answer

A)   filing for a business or trade name with the appropriate authority
B)   written legal agreement between shareholders
C)   filing article of incorporation under a provincial or federal statute
D)   partnership agreement to list with the securities commission
E)   None of the answers apply.F) B) and E)
G) A) and D)

Question 11

For the proprietorship, new capital can come only from loans by any number of sources: Often, an entrepreneur will take a second mortgage on his or her home as a source of capital.

Accepted Answer

A) True 
 B)False

Question 12

Proprietors receive all distributions of profits from the business. In the partnership, the distribution of profits and losses depends on the partnership agreement.

Accepted Answer

A) True 
 B)False

Question 13

For the proprietorship, Canada Revenue Agency (CRA) treats the business as the individual owner. All income appears on the owner's return as personal income.

Accepted Answer

A) True 
 B)False

Question 14

By law in Canada, unless specified by a partnership agreement to the contrary, all money and property brought into or acquired by the partnership __________.

Accepted Answer

A)   is shared in proportion to the contributions made by the partners
B)   is held in separate trust for the contributor(s)  should the partnership dissolve in the future
C)   becomes partnership property
D)   is capitalized at fair market value to be shared by partners in proportion to their contributions and role in the firm
E)   None of the answers apply.F) A) and D)
G) B) and C)

Question 15

Discuss the characteristics, advantages, and disadvantages of the sole proprietorship as an organizational structure.

Accepted Answer

As a form of business, the proprietorshi...

Question 16

By definition, the sole proprietor has unlimited liability, controls all decisions, and receives all profits of the business.

Accepted Answer

A) True 
 B)False

Question 17

Discuss the characteristics, advantages, and disadvantages of the partnership as an organizational structure.

Accepted Answer

Partnerships are created when two or mor...

Question 18

As a new venture grows, the role of entrepreneur changes to become more of a(n)  __________.

Accepted Answer

A)   adaptor
B)   allocator of resources
C)   negotiator
D)   problem solver
E)   All of the answers are correct.F) A) and C)
G) B) and E)

Question 19

Which of the following statements regarding partnerships and distribution of income is(are)  true?

Accepted Answer

A)   Income serves as the basis for determining the share of each partner.
B)   Income is distributed based on the partnership agreement.
C)   Partners report their share as personal income and are taxed at the regular rate.
D)   All of the answers are correct.
E)   None of the answers apply.F) A) and B)
G) D) and E)

Question 20

Discuss the characteristics, advantages, and disadvantages of the corporation as an organizational structure.

Accepted Answer

A corporation is a legal entity, separat...

Exam 6: Protecting the Idea and Other Legal Issues for the Entrepreneur

In a sole proprietorship, __________.

Correct Answer
verified

Which of the following statements regarding partnerships and distribution of income is(are) true?

Correct Answer
verified

In terms of management control, in a partnership, __________.

Correct Answer
verified

Discuss the characteristics, advantages, and disadvantages of the corporation as an organizational structure.

Correct Answer
verified
A corporation is a legal entity, separat...
View Answer

To contain or limit liability within a partnership, the company will __________.

Correct Answer
verified

When attempting to build a successful organizational culture, it is important for the entrepreneur to remember that __________.

Correct Answer
verified

As a new venture grows, the role of entrepreneur changes to become more of a(n) __________.

Correct Answer
verified

By definition, the sole proprietor has unlimited liability, controls all decisions, and receives all profits of the business.

Correct Answer
verified

Discuss the characteristics, advantages, and disadvantages of the partnership as an organizational structure.

Correct Answer
verified
Partnerships are created when two or mor...
View Answer

For the proprietorship, new capital can come only from loans by any number of sources: Often, an entrepreneur will take a second mortgage on his or her home as a source of capital.

Correct Answer
verified

Proprietors receive all distributions of profits from the business. In the partnership, the distribution of profits and losses depends on the partnership agreement.

Correct Answer
verified

Which of the following is not one of the criteria used by entrepreneurs when evaluating the different organizational structures for the new venture?

Correct Answer
verified

In Canada, a corporation can be created only by __________.

Correct Answer
verified

With regards to corporate boards of directors, the purpose of new legislation passed by the Ontario Securities Commission and the Canadian Dealers Association is to __________.

Correct Answer
verified

For the proprietorship, Canada Revenue Agency (CRA) treats the business as the individual owner. All income appears on the owner's return as personal income.

Correct Answer
verified

As shown in the Opening Profile, building an organization often takes not only commitment and dedication by the founder and/or CEO but also finding the right people to serve on the company's management team and then giving them the freedom to make decisions.

Correct Answer
verified

By law in Canada, unless specified by a partnership agreement to the contrary, all money and property brought into or acquired by the partnership __________.

Correct Answer
verified

Discuss the characteristics, advantages, and disadvantages of the sole proprietorship as an organizational structure.

Correct Answer
verified
As a form of business, the proprietorshi...
View Answer

As defined in the text, a form of business with a single owner who has unlimited liability, controls all decisions, and receives all profits is known as a(n) __________.

Correct Answer
verified

Correct Answer
verified

Exam 6: Protecting the Idea and Other Legal Issues for the Entrepreneur

In a sole proprietorship, __________.

Correct AnswerverifiedShow Answer

Which of the following statements regarding partnerships and distribution of income is(are) true?

Correct AnswerverifiedShow Answer

In terms of management control, in a partnership, __________.

Correct AnswerverifiedShow Answer

Discuss the characteristics, advantages, and disadvantages of the corporation as an organizational structure.

Correct AnswerverifiedA corporation is a legal entity, separat...View AnswerShow Answer

To contain or limit liability within a partnership, the company will __________.

Correct AnswerverifiedShow Answer

When attempting to build a successful organizational culture, it is important for the entrepreneur to remember that __________.

Correct AnswerverifiedShow Answer

As a new venture grows, the role of entrepreneur changes to become more of a(n) __________.

Correct AnswerverifiedShow Answer

By definition, the sole proprietor has unlimited liability, controls all decisions, and receives all profits of the business.

Correct AnswerverifiedShow Answer

Discuss the characteristics, advantages, and disadvantages of the partnership as an organizational structure.

Correct AnswerverifiedPartnerships are created when two or mor...View AnswerShow Answer

For the proprietorship, new capital can come only from loans by any number of sources: Often, an entrepreneur will take a second mortgage on his or her home as a source of capital.

Correct AnswerverifiedShow Answer

Proprietors receive all distributions of profits from the business. In the partnership, the distribution of profits and losses depends on the partnership agreement.

Correct AnswerverifiedShow Answer

Which of the following is not one of the criteria used by entrepreneurs when evaluating the different organizational structures for the new venture?

Correct AnswerverifiedShow Answer

In Canada, a corporation can be created only by __________.

Correct AnswerverifiedShow Answer

With regards to corporate boards of directors, the purpose of new legislation passed by the Ontario Securities Commission and the Canadian Dealers Association is to __________.

Correct AnswerverifiedShow Answer

For the proprietorship, Canada Revenue Agency (CRA) treats the business as the individual owner. All income appears on the owner's return as personal income.

Correct AnswerverifiedShow Answer

As shown in the Opening Profile, building an organization often takes not only commitment and dedication by the founder and/or CEO but also finding the right people to serve on the company's management team and then giving them the freedom to make decisions.

Correct AnswerverifiedShow Answer

By law in Canada, unless specified by a partnership agreement to the contrary, all money and property brought into or acquired by the partnership __________.

Correct AnswerverifiedShow Answer

Discuss the characteristics, advantages, and disadvantages of the sole proprietorship as an organizational structure.

Correct AnswerverifiedAs a form of business, the proprietorshi...View AnswerShow Answer

As defined in the text, a form of business with a single owner who has unlimited liability, controls all decisions, and receives all profits is known as a(n) __________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
A corporation is a legal entity, separat...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Partnerships are created when two or mor...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
As a form of business, the proprietorshi...
View Answer

Correct Answer
verified

Correct Answer
verified