Chapter Six - Legislation Governing Business Organizations Flashcards Preview

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Flashcards in Chapter Six - Legislation Governing Business Organizations Deck (6)
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1
Q

The 3 basic types of business organizations.

A
  1. Partnership.
  2. Sole Proprietorship.
  3. Corporation.
2
Q

This is NOT a characteristic of a sole proprietorship.

A

The owner employs him or herself in the business.

3
Q

This is a TRUE statement of a partnership.

A

The liability of each party for the debts of the partnership is unlimited.

4
Q

Under what business structure(s) can business owner’s personal assets be seized to fulfill obligations of the company?

A
  1. A partnership.

2. A sole proprietorship.

5
Q

These are TRUE statements about the securities of a corporation.

A
  1. Preferred shareholders generally only have contingent voting rights.
  2. Interest on bonds must be paid whether or not a corporation has earned a profit in that year.
6
Q

List 4 advantages of corporations over the other legal business structures.

A
  1. A corporation is a separate legal entity from the owners.
  2. The owners can limit their ability.
  3. A corporation has perpetual succession.
  4. A corporation owns it own property.