SBM156

BUSINESS LEGAL ISSUES AND INSURANCE

Assignment #1 (Chapter 1, 2 & 3)

1.  A sole proprietorship is relatively difficult and expensive to establish.

 True False

 2.  Legally you can not have a partnership without an agreement.

 True False

3.       Sole proprietorships have unlimited personal liability.

 True False

4.   Personal liability is always limited in a Corporation.

 True False

 5.  You have limited liability with an S Corporation but pay income tax on the same basis as a sole proprietor.

True False

6.  Partnerships can not do business using an assumed or fictitious name.

 True False

 7.  List 5 ways to value a partner’s shares of the business.

1.       _____________________________________

2.       _____________________________________

3.       _____________________________________

4.       _____________________________________

5.       _____________________________________

 8.   Directors manage the corporation and make major policy decisions.

True False

9.  Equity means shareholders contribute cash, valuable property, or service to a company in exchange for stock.

True False

10.      List the 6 basic procedures for incorporating a business.

1.____________________________________

2.____________________________________

3.____________________________________

4.____________________________________

5.____________________________________

6.___________________________________