Learning Management System

Subject Name

FIA0314 INTRODUCTION TO BUSINESS

Week

Topic

Choosing a Form of Business Ownership

Name : .... Lecturer : .................................

Intake : ......... Date

: .........

1) Dana wants to start a business, but she is unsure of the legal form best for
her. Short of cash, she has decided to take the form that is the least
expensive and most flexible in terms of decision making and
implementation. Which would you recommend?
A

Joint venture

Sole proprietorship

Partnership

Corporation

2) How can the following quotation best be explained: "Stockholders control

the activities of a corporation"?
Stockholders elect the board of
All stockholders vote on all the
A

major issues and problems that

a company faces on a monthly

directors, and this board is

C

basis.

responsible for appointing

corporate officers who manage
the daily business of the
corporation.
Stockholders vote for the

Stockholders are intricately

B

involved in the daily operations

of a corporation.

members of the board of

D

directors, and this board makes

all the daily business decisions
for the corporation

3) Walters Company, LLC, is a wholesale distributor of industrial packaging. A

primary advantage that Walters enjoys as an LLC that corporations do not
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have is ____________
A

ease of formation.

limited liability.

avoiding double taxation.

one class of outstanding stock.

4) When many banks join together to lend money to developing countries

such as Bangladesh and Malaysia, they seek to spread out the risk of
default. This is called ___________
A

a not-for-profit organization.

a quasi-government corporation.

a cooperative.

a syndicate.

5) If Avon and Merck joined together to produce a cream that slows down the
aging process, this would be called a(n) ______________
A

cooperative.

S-corporation.

joint venture.

partnership.

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