BUS 101 EXAM 2 REVIEW QUESTIONS AND
VERIFIED ACTUAL ANSWERS
a business owned, and usually managed, by one person - answer ✔✔-sole proprietorship
two or more people legally agree to become co-owners of a business - answer ✔✔-partnership
all owners share in operating the business and in assuming liability for the business's debts - answer
✔✔-general partnership
a partnership with one or more general partners and one or more limited partners - answer ✔✔-limited
partnership
a legal entity with authority to act and have liability apart from its owners - answer ✔✔-corporation
any debts or damages incurred by the business are your debts, even if it means selling your home, car,
or anything else - answer ✔✔-unlimited liability
the result of two firms joining to form one company - answer ✔✔-mergers (def. and example)
one company's purchase of the property and obligations of another company - answer ✔✔-acquisitions
(def. and example)
an attempt by employees, management or a group of investors to buy out the stockholders in a
company - answer ✔✔-levered buyout
an arrangement whereby someone with a good idea for a business (franchisor) sells the rights to use the
business name and sell a product or service (franchise) to others (franchisees) in a given territory -
answer ✔✔-franchise agreement
VERIFIED ACTUAL ANSWERS
a business owned, and usually managed, by one person - answer ✔✔-sole proprietorship
two or more people legally agree to become co-owners of a business - answer ✔✔-partnership
all owners share in operating the business and in assuming liability for the business's debts - answer
✔✔-general partnership
a partnership with one or more general partners and one or more limited partners - answer ✔✔-limited
partnership
a legal entity with authority to act and have liability apart from its owners - answer ✔✔-corporation
any debts or damages incurred by the business are your debts, even if it means selling your home, car,
or anything else - answer ✔✔-unlimited liability
the result of two firms joining to form one company - answer ✔✔-mergers (def. and example)
one company's purchase of the property and obligations of another company - answer ✔✔-acquisitions
(def. and example)
an attempt by employees, management or a group of investors to buy out the stockholders in a
company - answer ✔✔-levered buyout
an arrangement whereby someone with a good idea for a business (franchisor) sells the rights to use the
business name and sell a product or service (franchise) to others (franchisees) in a given territory -
answer ✔✔-franchise agreement
