Understanding Business and Personal Law

Chapter 27: Sole Proprietorship and Partnership

Sole Proprietorship and Partnership


1.	The articles of partnership are known as the
		A)	the general agreement.
		B)	registered liability agreement.
		C)	the liability agreement.
		D)	partnership agreement.


2.	Partnership property includes
		A)	all property belonging to the partnership and to the individual partners when the partnership was formed.
		B)	property contributed directly to the partnership when the partnership is created.
		C)	all property belonging to the partnership and one-half the property belonging to the individual partners.
		D)	property purchased prior to the creation of the partnership.


3.	A silent partner has no liability for the debts of the firm.
		A)	TRUE
		B)	FALSE


4.	The biggest disadvantage of a sole proprietorship is
		A)	unlimited liability.
		B)	limited lifetime.
		C)	limited human resources.
		D)	limited capital.


5.	A sole proprietorship is a
		A)	form of business whose profits are exempt from federal tax laws.
		B)	business which is exempt from zoning requirements.
		C)	form of business owned by one person.
		D)	business that does not require a license to operate.


6.	Dissolution of a partnership brings the business to an end.
		A)	TRUE
		B)	FALSE


7.	A partnership by estoppel is not a real partnership.
		A)	TRUE
		B)	FALSE


8.	A person who goes into business as a sole proprietor must operate under
		A)	both his or her name and a fictitious name.
		B)	either his or her name or a fictitious name.
		C)	a fictitious name.
		D)	his or her name.


9.	A sole proprietorship is the easiest form of business association to form.
		A)	TRUE
		B)	FALSE


10.	In a partnership, all partners share equally in the profits, unless there is an agreement to the contrary.
		A)	TRUE
		B)	FALSE