Chapter 3 quiz Corporations distribute profits to their owners in the form of A business's legal form of organization has no effect on how much taxes it pays

1. Corporations distribute profits to their owners in the form of

dividends

2. A business's legal form of organization has no effect on how much taxes it pays.

false

3. A limited partnership involves a complete sharing in the management of a business.

false

4. A limited partnership always has at least one general partner, who assumes unlimited liability.

True

5. Sole proprietorships typically employ fewer than 50 people.

True

6. In creating a corporation, once the articles of incorporation are filed with the appropriate state office, the state may then issue a

Corporate Charter

7. If you want to go into business for yourself, the easiest way is a sole proprietorship.

True

8. In the US, men are twice as likely as women to start their own business.

True

9. About three-quarters of all businesses in the United States are sole proprietorships, and they earn somewhere around 10 percent of total business income. We may conclude that

there are many sole proprietorships, but their average income is small.

10. Which of the following is an advantage of a partnership?

Ease of organization

11. Which of the following is a disadvantage of a partnership?

Difficulty of selling ownership

12. Big City Financial is attempting to avoid a hostile takeover by a corporate raider by allowing stockholders to buy more shares of stock at prices lower than current market value. Which of the following methods is being used to avoid the takeover?

a poison pill

13. In most states, corporations must have "corporation," "incorporated," or "limited" in their names to show that their owners have limited liability.

True

14. A sole proprietorship is a popular form of business because

it is easy to form

15. In a partnership, all partners are equally liable.

false

16. A corporation doing business outside the state in which it is chartered is known as a(n)

foreign corporation

17. Sole proprietorships have the least degree of secrecy.

False

18. All states require partnerships to have articles of partnership.

false

19. Articles of partnership are required by many states for businesses that have two or more co-owners. The issues covered usually include all of the following except

classes of stock to be issued

20. Shark repellant is a method of thwarting a corporate takeover in which management requires a large majority of stockholders to approve the takeover.

True