©SIRJOEL EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
Lenb Business Orgs Exam Questions And
Answers
Deciding what form of business to create is on of the ______ important decisions a business
makes. - Answers✔most
A ______ proprietorship is a business in which one person is in control of the management and
profits. - Answers✔sole
If a person started doing business without thinking about the form of the business, he or she
would be a(n) ______. - Answers✔sole proprietor
Which of the following is not a recognized advantage of a sole proprietorship? -
Answers✔Funding is unlimited as stock can be issued to address capital needs.
The proprietor is immune from personal liability for all losses.
Identify a recognized disadvantage of a sole proprietorship. - Answers✔Funding is limited to
personal funds and loans.
If a person decides to go into business on his or her own, he or she is creating a ______. -
Answers✔sole proprietorship
A(n) ______ is the single person at the head of a sole proprietorship - Answers✔sole proprietor
According to __________, a partnership is a voluntary association between two or more
persons who co-own a business for profit. - Answers✔the Uniform Partnership Act (UPA)
Which of the following is a recognized disadvantage of a sole proprietorship? - Answers✔The
proprietor has personal liability for all losses.
Which of the following is not a recognized advantage of a partnership? - Answers✔Individual
partners have immunity from personal liability for all business losses.
Financial capital can be raised through stock issuance.
1|Page
, ©SIRJOEL EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
A partnership is a ______ association between two or more persons who co-own a business for
______. - Answers✔voluntary; profit
Which of the following is a recognized disadvantage of a partnership? - Answers✔Each partner
has personal liability for all business losses.
Which of the following is not a duty of partners to one another? - Answers✔The beneficiary
duty to the other partners
A written agreement that creates a partnership is called the articles of ______. -
Answers✔partnership
Identify a recognized disadvantage of a partnership. - Answers✔In most cases, each partner has
personal liability for the business losses of another partner.
A partnership is a ______ association between two or more persons who co-own a business for
______. - Answers✔voluntary; profit
The articles of partnership usually include all but which of the following information? -
Answers✔The classes of stock issued by the partnership
Partners must, in good faith, work for the benefit of their partnership and refrain from taking
any kind of action that would undermine the partnership. This is known as the partners'
______. - Answers✔fiduciary duty
Which of the following is an accurate statement about the formation of partnerships? -
Answers✔A written agreement that creates a partnership is called the articles of partnership.
Parties not named in a partnership agreement can be considered partners through a
partnership by estoppel. Identify a true statement about such a party who is considered a
partner. - Answers✔In many states, the party can be held liable for the costs of the damages to
the customer.
Which of the following is typically not included in the articles of partnership? - Answers✔The
educational credentials and work experience of each partner
According to most states, in which of the following situations does a partnership by estoppel
exist? - Answers✔A third party is aware of a misrepresentation of partnership and consents to
the misrepresentation.
Which of the following is the second stage in the termination of a partnership? - Answers✔The
winding-up stage
______ defines the ______ of a partnership as the change in the relation of the partners caused
by any partner's ceasing to be associated with the carrying on of the business. - Answers✔The
Uniform Partnership Act (UPA); dissolution
2|Page
ALL RIGHTS RESERVED.
Lenb Business Orgs Exam Questions And
Answers
Deciding what form of business to create is on of the ______ important decisions a business
makes. - Answers✔most
A ______ proprietorship is a business in which one person is in control of the management and
profits. - Answers✔sole
If a person started doing business without thinking about the form of the business, he or she
would be a(n) ______. - Answers✔sole proprietor
Which of the following is not a recognized advantage of a sole proprietorship? -
Answers✔Funding is unlimited as stock can be issued to address capital needs.
The proprietor is immune from personal liability for all losses.
Identify a recognized disadvantage of a sole proprietorship. - Answers✔Funding is limited to
personal funds and loans.
If a person decides to go into business on his or her own, he or she is creating a ______. -
Answers✔sole proprietorship
A(n) ______ is the single person at the head of a sole proprietorship - Answers✔sole proprietor
According to __________, a partnership is a voluntary association between two or more
persons who co-own a business for profit. - Answers✔the Uniform Partnership Act (UPA)
Which of the following is a recognized disadvantage of a sole proprietorship? - Answers✔The
proprietor has personal liability for all losses.
Which of the following is not a recognized advantage of a partnership? - Answers✔Individual
partners have immunity from personal liability for all business losses.
Financial capital can be raised through stock issuance.
1|Page
, ©SIRJOEL EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
A partnership is a ______ association between two or more persons who co-own a business for
______. - Answers✔voluntary; profit
Which of the following is a recognized disadvantage of a partnership? - Answers✔Each partner
has personal liability for all business losses.
Which of the following is not a duty of partners to one another? - Answers✔The beneficiary
duty to the other partners
A written agreement that creates a partnership is called the articles of ______. -
Answers✔partnership
Identify a recognized disadvantage of a partnership. - Answers✔In most cases, each partner has
personal liability for the business losses of another partner.
A partnership is a ______ association between two or more persons who co-own a business for
______. - Answers✔voluntary; profit
The articles of partnership usually include all but which of the following information? -
Answers✔The classes of stock issued by the partnership
Partners must, in good faith, work for the benefit of their partnership and refrain from taking
any kind of action that would undermine the partnership. This is known as the partners'
______. - Answers✔fiduciary duty
Which of the following is an accurate statement about the formation of partnerships? -
Answers✔A written agreement that creates a partnership is called the articles of partnership.
Parties not named in a partnership agreement can be considered partners through a
partnership by estoppel. Identify a true statement about such a party who is considered a
partner. - Answers✔In many states, the party can be held liable for the costs of the damages to
the customer.
Which of the following is typically not included in the articles of partnership? - Answers✔The
educational credentials and work experience of each partner
According to most states, in which of the following situations does a partnership by estoppel
exist? - Answers✔A third party is aware of a misrepresentation of partnership and consents to
the misrepresentation.
Which of the following is the second stage in the termination of a partnership? - Answers✔The
winding-up stage
______ defines the ______ of a partnership as the change in the relation of the partners caused
by any partner's ceasing to be associated with the carrying on of the business. - Answers✔The
Uniform Partnership Act (UPA); dissolution
2|Page
