Business Structures and Fundraising Quiz

Questions and Answers

How do corporations raise money and resources to expand? (Check all that apply)

They agree to sell stocks. (correct)

They save business profits.

They issue bonds. (correct)

They request a bank loan. (correct)

They cash in dividends.

A disadvantage of forming a partnership is that owners:

Can find it tougher to start and stop a business.

Can find it more difficult to get a bank loan.

Are only responsible for their own finances.

Are fully responsible for their partners' losses. (correct)

Which are examples of sole proprietorships? (Check all that apply)

Independent workers (correct)

Franchise restaurants in a partnership

Freelance writers (correct)

Doctors in a partnership

Lawyers working for a corporation

Tax preparer working his own business (correct)

Which can be considered disadvantages of sole proprietorships and partnerships?

Sole proprietorships require one person to do many things, while partnerships require many people to weigh in on decisions. Signup and view all the answers

The most common business organizations in the United States are:

Sole proprietorships Signup and view all the answers

Entrepreneurs who want to open a franchise:

Buy the rights from the parent company and invest in a location approved by the parent company. Signup and view all the answers

Which best describes the difference between preferred and common stocks?

Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights. Signup and view all the answers

People who buy stock in a company are known as?

shareholders Signup and view all the answers

Franchises are attractive to business owners because:

They have a proven business model. Signup and view all the answers

Which document determines the number of shares a company can sell?

A corporate charter Signup and view all the answers

Study Notes

Corporations and Fundraising

Corporations raise funds through bank loans, retained profits, stock sales, and bond issuance.

Partnerships

Owners in a partnership are fully responsible for their partners' losses, presenting a significant risk.

Sole Proprietorships

Examples include independent workers, tax preparers with their own business, and freelance writers.

Disadvantages of Business Structures

Sole proprietorships require one individual to handle diverse responsibilities, while partnerships task multiple individuals with decision-making.

Common Business Organizations

In the U.S., sole proprietorships rank as the most common form of business organization.

Franchises

Franchise entrepreneurs purchase rights from the parent company and must invest in an approved location.

Stock Types

Common stockholders have voting rights per share, whereas preferred stockholders receive dividend priority but lack voting rights.

Shareholders

Individuals who buy stock in a company are referred to as shareholders.

Attractiveness of Franchises

Franchises lure business owners due to established business models and reduced risk factors.

Corporate Documents

A corporate charter outlines the maximum number of shares a company can issue.

Description

Test your knowledge on various business structures, including corporations, partnerships, and sole proprietorships. This quiz covers aspects like fundraising methods, responsibilities of owners, and types of stock. Understand the advantages and disadvantages of different business organizations.