ARE 5.0 Practice Management Exam
With Correct Answers
Sole Proprietorship Correct Answers The business is owned by an individual
General Partnership Correct Answers Two or more people (general partners) share in
the management, profits and risk of the business
Limited Partnership Correct Answers 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 Correct Answers An association of individuals (stockholders, directors
and officers) that exists as a legal entity apart from its members
Stockholders Correct Answers Owners of the corporation in proportion to the number of
shares they own
Directors Correct Answers Have the fiduciary duty to act in the best interest of the
stockholders and are responsible for broad policy decisions
Officers Correct Answers Carry out the day-to-day management of the corporation
S Corporation Correct Answers 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 Correct Answers Similar to other corporations except that
liability for malpractice is limited to the person responsible for the act.
Limited Liability Company (LLC) Correct Answers 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 Correct Answers 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 Correct Answers 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 Correct Answers 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 Correct Answers 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 Correct Answers 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)
Studio Organization Correct Answers Staff is organized in groups called studios. Each
studio is responsible for completing an entire project (Vertical Organization or Tall
Organization)
Outsourcing Correct Answers Contracting with another company to do some of the work
needed for a project
Support Staff Correct Answers Employees other than the professional staff and senior
management
Business License Correct Answers Allows the business to practice and usually serves
as a basis for taxation
Certificate of Authorization (COA) Correct Answers Some states require a firm to obtain
this in order to offer services to the public
Human Resources Management Correct Answers Involves the entire range of hiring,
compensating, managing and terminating employees, along with the legal
responsibilities of having employees (personnel management)
Formal Employee Contract Correct Answers Spells out the employee's responsibilities,
work duties and compensation, as well as the firms benefits, work conditions,
termination procedures and policies
Independent Contractor Correct Answers Person hired for a specific project. They
control where and how they perform their work and provide their own supplies and
equipment
Job Description Correct Answers Defines the duties and responsibilities of the person
holding a specific job title
Personnel Policy Manuel Correct Answers A positive statement of the firms commitment
to employees, clients and the public at large
With Correct Answers
Sole Proprietorship Correct Answers The business is owned by an individual
General Partnership Correct Answers Two or more people (general partners) share in
the management, profits and risk of the business
Limited Partnership Correct Answers 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 Correct Answers An association of individuals (stockholders, directors
and officers) that exists as a legal entity apart from its members
Stockholders Correct Answers Owners of the corporation in proportion to the number of
shares they own
Directors Correct Answers Have the fiduciary duty to act in the best interest of the
stockholders and are responsible for broad policy decisions
Officers Correct Answers Carry out the day-to-day management of the corporation
S Corporation Correct Answers 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 Correct Answers Similar to other corporations except that
liability for malpractice is limited to the person responsible for the act.
Limited Liability Company (LLC) Correct Answers 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 Correct Answers 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 Correct Answers 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 Correct Answers 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 Correct Answers 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 Correct Answers 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)
Studio Organization Correct Answers Staff is organized in groups called studios. Each
studio is responsible for completing an entire project (Vertical Organization or Tall
Organization)
Outsourcing Correct Answers Contracting with another company to do some of the work
needed for a project
Support Staff Correct Answers Employees other than the professional staff and senior
management
Business License Correct Answers Allows the business to practice and usually serves
as a basis for taxation
Certificate of Authorization (COA) Correct Answers Some states require a firm to obtain
this in order to offer services to the public
Human Resources Management Correct Answers Involves the entire range of hiring,
compensating, managing and terminating employees, along with the legal
responsibilities of having employees (personnel management)
Formal Employee Contract Correct Answers Spells out the employee's responsibilities,
work duties and compensation, as well as the firms benefits, work conditions,
termination procedures and policies
Independent Contractor Correct Answers Person hired for a specific project. They
control where and how they perform their work and provide their own supplies and
equipment
Job Description Correct Answers Defines the duties and responsibilities of the person
holding a specific job title
Personnel Policy Manuel Correct Answers A positive statement of the firms commitment
to employees, clients and the public at large
