Patterns of Entrepreneurship Management 4th Edition by Kaplan – Test Bank

Patterns of Entrepreneurship Management 4th Edition by Kaplan – Test Bank

Chapter 6: Setting up the Company

True/False

1. Unfortunately, with the way the laws are written, the sole owner does not have the right to make all the decisions for the business.
Ans: False Page: 133

2. One of the most attractive features of sole proprietorships is how fast and simple it is to begin operations.
Ans: True Page: 134

3. In choosing a form of ownership, entrepreneurs must remember that there is no single “best” form.
Ans: True Page: 134

4. The greatest advantage of a sole proprietorship is unlimited personal liability.
Ans: False Page: 135

5. When a corporation is founded, it does not have to accept the regulations and restrictions of the state in which it is incorporated and of each state in which it does business.
Ans: False Page: 136

6. When a corporation is established, its equity is divided among a number of shares of stock that are issued to the investors in proportion to their investment in the corporation.
Ans: True Page: 136

7. The board is selected by the CEO and she or he has the power to remove board members.
Ans: False Page: 136

8. The ownership of a corporation lies in the stockholders and is evidenced by stock certificates issued to the shareholder.
Ans: True Page: 139

9. The total number of issued shares outstanding in a company is most often shown in the annual report.
Ans: True Page: 140

10. A disadvantage of a limited liability company is that the owners do not assume liabilities for debt.
Ans: False Page: 146