FSE 2202 Mid Term Prep Questions and Answers Already Passed
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Course
FSE 2202 Mid Term Prep
Institution
FSE 2202 Mid Term Prep
FSE 2202 Mid Term Prep Questions and
Answers Already Passed
What document outlines the specific rights and responsibilities of each partner in a partnership?
Partnership Agreement
How would you describe a sole proprietorship? A business operated by an individual who is
the sole owner
...
1 FSE 2202 Mid Term Prep Questions and Answers Already Passed What document outlines the specific rights and responsibilities of each partner in a par tnership? ✔✔Partnership Agreement How would you describe a sole proprietorship? ✔✔A business operated by an individual who is the sole owner What are some benefits of forming a partnership? ✔✔• Collective management, skills, and financial resources • Sim plicity of establishment • Increased labor efficiency • Opportunity for employees to invest in the business • Each partner brings their goodwill to the enterprise What are the advantages of a sole proprietorship? ✔✔• Simple setup • Minimal organizational costs • Full control of profits 2 • Quick decision -making • Confidential operations • Direct customer recognition • Unique credit profile What are some drawbacks of a partnership? ✔✔• Lack of business continuity • Joint responsibility for decisions • Locked -in investments • Risk of unequal profit distribution What is a legal entity established by the state to conduct business? ✔✔Corporation What are the disadvantages associated with a sole proprietorship? ✔✔• Unlimited personal financial risk • Res tricted business scale • Finite lifespan • Limited managerial capacity • Fewer opportunities for employees 3 • Challenges in securing capital What is the formal application for incorporating a business, approved by a state official? ✔✔Incorporation Certific ate What legal structure involves a business entity formed by two or more individuals to operate jointly? ✔✔Partnership In a partnership, who is the partner with limited liability and not involved in day -to-day management? ✔✔Limited Partner What type of business organization is legally recognized as having its own distinct existence? ✔✔Corporation Who in a limited partnership holds unlimited personal liability? ✔✔General Partner What document indicates the number of shares held by a shareholder? ✔✔Share Certificate
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