FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Forms of Business Ownership

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

Multiple Choice

Review LaterAdd Note

Review Later

A__________ is the share of profits or percentage of sales a franchisee pays to a franchisor.

A) royalty
B) dividend
C) co-pay
D) premium

E) B) and D)
F) C) and D)

Correct Answer

verified

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

Dr.Driller is a dentist who is interested in incorporating as an individual.If he attempts to do so,Dr.Driller is likely to find that:

A) he may actually save on taxes.
B) his business will be owned by a large number of stockholders with whom he must share his income.
C) the procedures for an individual to incorporate are extremely complex.
D) most provinces do not allow individuals to incorporate.

E) C) and D)
F) A) and B)

Correct Answer

verified

Show Answer

Question 53

Multiple Choice

Review LaterAdd Note

Which of the following people would be most interested in participating in a business organized as a co-operative?

The largest co-operative sector is the agricultural (farm)co-op.

Partnerships have the largest share of business revenue in Canada.

Marco is a franchisee with Daggies,a chain of sandwich shops.His business was doing well until several Daggies franchisees got in trouble and were forced to close their shops.Soon afterward,Marco's business deteriorated and he too was forced to close.

Which of the following is an advantage of a sole proprietorship?

In a partnership,a(n) __________partner is an owner who is active in managing the company and has unlimited liability for claims against the firm.

Leanne is a franchisee in a restaurant chain.Thanks mainly to her hard work and people skills,her individual outlet is doing quite well.However,she has noticed that several other franchisees in the same chain have let their businesses deteriorate,especially in terms of the quality of the food they offer.Leanne should be very concerned about this trend,since it eventually could affect her own business.

Which of the following statements about partnerships is the most accurate?

Franchisees must follow more rules,regulations,and procedures than if they operated independently owned businesses.

One drawback of franchises is that they have a much higher failure rate than other types of business ventures.

In a franchise arrangement,ownership of all of the individual stores or outlets remains in the hands of the franchisor.

Which of the following is an advantage of the corporate form of business when compared to sole proprietorships and partnerships?

The three major forms of business ownership in Canada are sole proprietorships,partnerships,and corporations.

Rhonda has agreed to invest $16,000 in a partnership with her sister and brother-in-law.Rhonda does not plan to work in the partnership,nor does she wish to risk any of her own wealth other than the $16,000 she invests,but she does intend to share in any profits earned by the partnership.Evidently,Rhonda will be a:

Sharon,Lois and Sam have just formed a business partnership.Under their arrangement,Sharon will actively manage the company and assume unlimited liability for the firm's debts.Sam and Lois will invest several thousand dollars of their money and will share in the profits,but will not actively manage the firm and will not have liability for losses beyond their initial investment.This describes a limited partnership.

Stockholders in a corporation normally exert a significant degree of control over the company's daily operations.

A general partner has unlimited liability for the debts of the partnership only if he or she personally approved the decisions that resulted in those debts.

The most popular global market for U.S.franchisors has been Canada.