ARE 5.0 Practice Management
Exam 2026
Sole Proprietorship—ANSWER--The business is owned by an individual
General Partnership—ANSWER--Two or more people (general partners) share in the
management, profits and risk of the business
Limited Partnership—ANSWER--Has at least one general partner (invests in the business,
manages it and are financially responsible for it) and at least one limited partner (investor who
receives a portion of the profits but has no say in the management of the company)
C Corporation—ANSWER--An association of individuals (stockholders, directors and officers)
that exists as a legal entity apart from its members
Stockholders—ANSWER--Owners of the corporation in proportion to the number of shares
they own
Directors—ANSWER--Have the fiduciary duty to act in the best interest of the stockholders
and are responsible for broad policy decisions
Officers—ANSWER--Carry out the day-to-day management of the corporation
, S Corporation—ANSWER--A corporation that chooses to allocate it's income and losses
directly to shareholders in proportion to their holdings. Limited to small business corporations
with less than 100 shareholders.
Professional Corporation—ANSWER--Similar to other corporations except that liability for
malpractice is limited to the person responsible for the act.
Limited Liability Company (LLC)—ANSWER--Business structure that combines the
advantages of a partnership or sole proprietorship with the limited liability of a corporation.
(Aka LLP Limited Liability Partnership)
Joint Venture—ANSWER--A temporary association of two or more persons or firms for the
purpose of completing a specific project or achieving a specific goal
Teaming Agreement—ANSWER--Defines the roles, responsibilities and contractual
relationships that will be established if the firms are awarded the project and the joint venture
is formed. (Aka Memorandum of Understanding)
Memorandum of Understanding—ANSWER--Defines the roles, responsibilities and
contractual relationships that will be established if the firms are awarded the project and the
joint venture is formed (Aka Teaming Agreement)
Standard of Care—ANSWER--The level of skill and diligence that a reasonably prudent
architect would exercise in the same community, in the same time frame, and given the same
or similar facts and circumstances
Departmental Organization—ANSWER--Staff is organized into departments, each of which
specializes in a different function. A project moves from one department to another in its route
from start to finish (Horizontal Organization or Flat Organization)
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law, Copyrighted By Brittie Donald
Exam 2026
Sole Proprietorship—ANSWER--The business is owned by an individual
General Partnership—ANSWER--Two or more people (general partners) share in the
management, profits and risk of the business
Limited Partnership—ANSWER--Has at least one general partner (invests in the business,
manages it and are financially responsible for it) and at least one limited partner (investor who
receives a portion of the profits but has no say in the management of the company)
C Corporation—ANSWER--An association of individuals (stockholders, directors and officers)
that exists as a legal entity apart from its members
Stockholders—ANSWER--Owners of the corporation in proportion to the number of shares
they own
Directors—ANSWER--Have the fiduciary duty to act in the best interest of the stockholders
and are responsible for broad policy decisions
Officers—ANSWER--Carry out the day-to-day management of the corporation
, S Corporation—ANSWER--A corporation that chooses to allocate it's income and losses
directly to shareholders in proportion to their holdings. Limited to small business corporations
with less than 100 shareholders.
Professional Corporation—ANSWER--Similar to other corporations except that liability for
malpractice is limited to the person responsible for the act.
Limited Liability Company (LLC)—ANSWER--Business structure that combines the
advantages of a partnership or sole proprietorship with the limited liability of a corporation.
(Aka LLP Limited Liability Partnership)
Joint Venture—ANSWER--A temporary association of two or more persons or firms for the
purpose of completing a specific project or achieving a specific goal
Teaming Agreement—ANSWER--Defines the roles, responsibilities and contractual
relationships that will be established if the firms are awarded the project and the joint venture
is formed. (Aka Memorandum of Understanding)
Memorandum of Understanding—ANSWER--Defines the roles, responsibilities and
contractual relationships that will be established if the firms are awarded the project and the
joint venture is formed (Aka Teaming Agreement)
Standard of Care—ANSWER--The level of skill and diligence that a reasonably prudent
architect would exercise in the same community, in the same time frame, and given the same
or similar facts and circumstances
Departmental Organization—ANSWER--Staff is organized into departments, each of which
specializes in a different function. A project moves from one department to another in its route
from start to finish (Horizontal Organization or Flat Organization)
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law, Copyrighted By Brittie Donald
