BMGT 110 – Quiz 3 Week 4

1. A Limited Liability Corporation (LLC) is:

a. A business structure that requires a Board of Directors to guide decision-making.

b. A business structure where the owner is responsible for all the financing.

c. A business entity that all of the owners are responsible for any losses.

d. A business structure that provides the limited liability aspect of a corporation but the tax efficiencies of a partnership.

2. If your business has four partners, all with limited liabilities you are organizes as a:

a. LLP

b. B corporation

c. Partnership

d. S corporation

3. A business entity that has shared ownership among two or more individuals is a _______.

a. Partnership

b. LLC

c. Sole proprietor

d. C corporation

4. When Bank A decides to expand into another state and buys Bank B, this would be an example of a(n):

a. Acquisition

b. Alliance

c. Partnership

d. Merger

5. Which of the following statements regarding a franchise is correct?

a. A franchise lets you use their idea to run the business the way you decide

b. A franchise gives you their product to sell anywhere you want to

c. A franchise gives you the opportunity to make changes to their products and services

d. A franchise gives you a product or service and a proven method of doing business.

6. What is step 8 of the SBA’s 10 Step Guide to Starting a Small Business?

a. Conduct market research

b. Obtain deferral and state tax IDs

c. Register your business

d. Fund your business

7. You want you to maximize income and not pay taxes as an individual and a company. In addition, you want to limit your personal liability if you are sued. You would want your business entity to be a:

a. LLC

b. B corporation

c. C corporation

d. Partnership

8. The following are traits of an entrepreneur EXCEPT:

a. Doesn’t take NO for an answer

b. Rule follower

c. Risk taker

d. Energetic

9. When ABC company combines their business with XYZ company, this is called a(n):

a. Alliance

b. Acquisition

c. Partnership

d. Merger

10. A disadvantage of a C corporation is:

a. Easy to raise additional capital

b. Double taxation

c. It’s a legal entity separate from the owners

d. Company can live on after the owners pass

11. The biggest advantage of owning your own business is:

a. Being your own boss

b. Hiring employees

c. Working part-time

d. Wearing what you want to work

12. The first section of the Business Plan is also the most important. It is titled as:

a. Financial projections

b. Competitive analysis

c. Executive summary

d. Marketing and sales

13. According to the SBA the first three steps to starting your business are: _____, write a business plan, and fund your business.

a. Select your investors

b. Conduct market research

c. Decide on a name and logo

d. Create a website

14. What are some of the first things to consider when deciding to start a business?

a. Payroll and inventory selection

b. Store layout and branding

c. Risk tolerance, start-up costs and taxation

d. Hours of operation and signage

15. Smithfield foods, a pork processing company that makes bacon, hams, etc. has decided to buy some hog farms. This is an example of:

a. Licensing agreement

b. Strategic alliance

c. Horizontal merger

d. Vertical integration or acquisition

16. Which of the following can be classified as a small business and qualify for SBA financing and government contracts?

a. A for-profit clothing manufacturer with 480 employees

b. A non-profit school with 500 employees

c. A for-profit small department store with a 3-year average revenue of $9.8 million

d. A bank with 3000 employees and locations in 3 states

17. About ______ of all women-owned employer firms were minority owned.

a. One-half

b. Two-thirds

c. One-third

d. One-quarter

18. Since 1990, as large businesses eliminated 4 million jobs, small businesses added ______ more (LOU, 2014).

a. 10 million

b. 1.5 million

c. 3 million

d. 8 million

19. The purpose of the Market Analysis section of the Business Plan is to:

a. Detail your offerings and any market differentiators such as copyrights or patents.

b. Describe your legal structure (e.g., sole proprietorship, partnership, corporation) and introduce yourself and management team or advisors.

c. Summarize your understanding of the economy, industry, your target market and related trends and developments

d. Provide a more detailed description of your company, including the opportunity (aka market problem addressed) and your solution

20. What is an advantage to being a sole proprietor?

a. Business is taxes separately from the owner

b. Control over all aspects of the business

c. Unlimited access to capital

d. Can rely on a partner for help