Module 6 Legislation Governing Business Organizations Flashcards Preview

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Flashcards in Module 6 Legislation Governing Business Organizations Deck (10)
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1

What is sole proprietorship?
a) A corporation with a single shareholder.
b) A business with a single owner that does not operate as a separate legal identity.
c) A business with a separate legal identity centred around a single owner.

b) A business with a single owner that does not operate as a separate legal identity.

2

What is a partnership?
a) A corporation with only two shareholders.
b) An organization that is formed when two people decide to purchase property together.
c) A business with two or more owners that does not operate as a separate legal entity.

c) A business with two or more owners that does not operate as a separate legal entity.

3

What is a corporation?
a) A separate and distinct legal entity from its owners.
b) A collection of distinct legal entities, the shareholders, that function collectively.
c) A separate legal entity created for the purpose of providing owners with tax advantages.

a) A separate and distinct legal entity from its owners.

4

What is an advantage of a sole proprietorship?
a) It does not require the owner to take on a lot of liability.
b) It is fast and easy to set up.
c) It allows the owner access to financial resources.

b) It is fast and easy to set up.

5

What is an advantage of a partnership?
a) The partners have access to more financing than in a sole proprietorship.
b) The partners have no liability for the business debt.
c) The partners can easily pass the business on to the next generation.

a) The partners have access to more financing than in a sole proprietorship.

6

What is a limited partnership?
a) A partnership in which the liability of all partners is limited, as in a corporation.
b) A partnership in which the authority of some partners is limited.
c) A partnership in which partners have different levels of liability.

c) A partnership in which partners have different levels of liability.

7

What is one characteristic included in the legal definition of a partnership under the Partnership Act?
a) It is in common, in other words all partners are involved in the business.
b) It is a separate legal entity.
c) It is formed for the joint ownership of property.

a) It is in common, in other words all partners are involved in the business.

8

What is an advantage of a corporation?
a) There is less regulation and therefore more flexibility.
b) The owners are not personally liable for the debts of the business.
c) It is easy to set up.

b) The owners are not personally liable for the debts of the business.

9

What is a private corporation?
a) One which does not aspire to rapid growth.
b) One which does not require the loans from financial institutions.
c) One whose shares are not available for purchase by the general public.

c) One whose shares are not available for purchase by the general public.

10

What are Articles of Incorporation?
a) A legal document forming the corporation that is registered with a provincial or the federal government.
b) A legal document outlining the structure of the corporation.
c) A legal document describing the business plan for the corporation.

a) A legal document forming the corporation that is registered with a provincial or the federal government.