Entrepreneurship And Business Ownership Quiz

A partnership is a type of business structure where two or more owners come together to operate and share financial responsibility for the firm's debts. In a partnership, the owners share both the management and the financial obligations of the business. This means that they are jointly responsible for the firm's debts and liabilities. Therefore, the statement "A partnership is when a business with two or more owners who share in the operation of the firm and in financial responsibility for the firm's debts" is true.

A limited partner is a type of partner in a partnership who typically does not have an active role in the day-to-day operations of the business. Their liability is limited to the amount they have invested in the partnership, meaning they are not personally responsible for the partnership's debts or obligations beyond their initial investment. This is in contrast to general partners who have unlimited liability and are actively involved in managing the business. Therefore, the statement that a limited partner's liability is limited to the amount invested in the partnership is true.

Limited liability refers to the legal protection that investors have when investing in a corporation. This means that their personal assets are separate from the corporation's assets, and in the event of bankruptcy, the investors are not personally responsible for the corporation's debts. Therefore, the statement is true.

A co-operative is an organization that is formed to benefit its owners in the form of reduced prices and/or the distribution of surpluses at year-end. This means that the main purpose of a co-operative is to provide its members with economic benefits, such as lower prices for goods or services, or sharing profits at the end of the year. An example of a co-operative is a housing co-op, where members collectively own and manage the housing units, and enjoy the benefits of reduced costs or profit sharing. Therefore, the statement "A co-operative is an organization that is formed to benefit its owners in the form of reduced prices and/or the distribution of surpluses at year-end" is true.

A general partner is indeed a partner who is actively involved in managing the firm and has unlimited liability. This means that they are responsible for the debts and obligations of the partnership and have decision-making authority in the day-to-day operations of the business. Unlike limited partners, general partners have a greater level of control and responsibility in the partnership. Therefore, the statement "A general partner is when a partner who is actively involved in managing the firm and has unlimited liability" is true.

The correct answer is "Board of directors." The board of directors is a group of individuals elected by a firm's shareholders. They have the responsibility of overseeing and taking legal responsibility for the firm's actions. They make important decisions, set strategic goals, and appoint the CEO and other top executives. The board of directors acts as a governing body, ensuring that the firm operates in the best interest of its shareholders and stakeholders. They play a crucial role in providing guidance and accountability to the management team.

A public corporation is a business whose stock is available for sale to the general public. This means that anyone can buy shares of the company's stock on the stock market. The statement in the question is incorrect because it states that the stock of a public corporation is not usually available for sale to the general public, which is false.

A private corporation is a business whose stock is not widely held and available for sale to the general public. Instead, the stock is typically held by a small number of shareholders who are often the founders, their families, or a select group of investors. This allows the company to maintain control over its operations and decision-making processes. In contrast, a public corporation is one whose stock is offered to the general public and traded on a stock exchange.

A franchise is an arrangement that allows individuals or businesses (franchisees) to sell the products or services of a larger company (franchiser). This agreement grants the franchisee the right to operate under the established brand name and business model of the franchiser. It provides the franchisee with a proven business concept, support, and access to a recognized brand, while the franchiser benefits from expanding their business through the efforts of independent franchisees.

Stockholders or shareholders are the investors who own shares of a stock in a company. They are individuals or entities that have invested their money in a company by purchasing its shares. Shareholders have a stake in the company and are entitled to certain rights, such as voting on important matters and receiving dividends. Directors, on the other hand, are individuals elected by the shareholders to oversee the management of the company. Therefore, the correct answer is A & C, as stockholders are the investors and directors are also considered shareholders.