TN Business And Law Exam|
Questions And Answers | All Correct
Solutions| Update 2026
Success Factors in Your Business - Ans--organized, consistent approach
Factors in Business Failure - Ans--poor planning and inadequate
management
Entrepreneur - Ans--a person engaged in strategic activities that involve
initiation and development of a new business
Calculated Risk - Ans--something that is well thought through where all
outcomes are considered
Rewards of Owning Your Own Business - Ans--own boss, flexible time,
freedom and independence, personal satisfaction
Challenges of Owning Business - Ans--long hours, manage cash flow,
payroll, overwhelming responsibility, finding/keeping employees, taxes,
government regulations
Business Plan - Ans--a document that outlines business strategies and
goals
Key Functions of a Business Plan - Ans--planning tool, loan or investor
document, benchmarking tool
Element of a Business Plan - Ans--cover page, executive summary,
company summary, products and services, market analysis, market
strategy, financial plan
What could be a pitfall to a business plan? - Ans--must portray an accurate
picture of business
,What are the different types of business structures? - Ans--sole
proprietorship, partnership, c corporation, s corporation, limited liability
company
Sole Proprietorship - Ans--a business that has one individual as the owner
who is responsible for 100% of the decisions made on behalf of the
business and owns all of the business assets
Advantages of a Sole Proprietorship - Ans--minimal legal restrictions,
simple ownership form, low startup cost, sole owner of profits, freedom in
decision making
Disadvantages to a Sole Proprietorship - Ans--unlimited liability, less
available capital, possible difficulty in obtaining long term financing,
dissolution of the business in even of owner death
Partnership - Ans--a business relationship between two or more persons
who join to carry on a trade or business. each person contributes money,
property, labor, or skill, and each partner expects to share in the profits and
losses of the business.
Two types of partnership - Ans--general and limited
Advantages of a General Partnership - Ans--ease of formation, direct profit
rewards, larger management base than that of a sole proprietorship
Disadvantages to a General Partnership - Ans--unlimited liability, potential
for disagreements, lack of continuity, difficulty in withdrawing from a
partnership
C Corporation - Ans--a legal business entity that has independent
ownership of assets and liabilities from its shareholders
Requirements of C Corporation - Ans--board of directors and corporate
officers, stockholders as owner of the company, board meetings, board
empowered to authorize certain actions
, Advantages of a C Corporation - Ans--separate legal entity, limited liability
for stockholders, unlimited life of the business, availability of capital
resources, transfer of ownership though stock
Disadvantages to a C Corporation - Ans--complex and expensive
organization, limitations on corporations activities and decisions by the
corporate charter, extensive record keeping and regulation, double taxation
S Corporation - Ans--a legal business entity formed under the rules of
Subchapter S of the Internal Revenue Code. It is taxed like a partnership by
passing items of income, loss, deduction, and credits through to its
shareholders to be included on their separate returns
Requirements for S Corporation - Ans--one class of stock, no more than
100 shareholders who are citizens or legal residents of US, filing of IRS
Form 2553
Limited Liability Company (LLC) - Ans--a legal business entity that has
characteristics of both sole proprietorships and corporations. Federal
income taxes are paid only on income distributed to members as ordinary
income. Member have protection from liability for actions taken by the
company or by other members of your company but are not protected from
liability for personal actions.
Advantages of a LLC - Ans--limited disclosure of owners, limited
documentation, no advance IRS filings, no public disclosure of finances,
limited liability for managers and members, ability to delegate management
to non members
Joint Venture - Ans--generally formed on a project basis in order to integrate
positive attributes and resources of to or more companies
Purpose of Licensing - Ans--protects the health, safety, and welfare of the
public
Tennessee Board of Licensing Contractors - Ans--regulates contracting
activities through examination, licensure, and disciplinary
Questions And Answers | All Correct
Solutions| Update 2026
Success Factors in Your Business - Ans--organized, consistent approach
Factors in Business Failure - Ans--poor planning and inadequate
management
Entrepreneur - Ans--a person engaged in strategic activities that involve
initiation and development of a new business
Calculated Risk - Ans--something that is well thought through where all
outcomes are considered
Rewards of Owning Your Own Business - Ans--own boss, flexible time,
freedom and independence, personal satisfaction
Challenges of Owning Business - Ans--long hours, manage cash flow,
payroll, overwhelming responsibility, finding/keeping employees, taxes,
government regulations
Business Plan - Ans--a document that outlines business strategies and
goals
Key Functions of a Business Plan - Ans--planning tool, loan or investor
document, benchmarking tool
Element of a Business Plan - Ans--cover page, executive summary,
company summary, products and services, market analysis, market
strategy, financial plan
What could be a pitfall to a business plan? - Ans--must portray an accurate
picture of business
,What are the different types of business structures? - Ans--sole
proprietorship, partnership, c corporation, s corporation, limited liability
company
Sole Proprietorship - Ans--a business that has one individual as the owner
who is responsible for 100% of the decisions made on behalf of the
business and owns all of the business assets
Advantages of a Sole Proprietorship - Ans--minimal legal restrictions,
simple ownership form, low startup cost, sole owner of profits, freedom in
decision making
Disadvantages to a Sole Proprietorship - Ans--unlimited liability, less
available capital, possible difficulty in obtaining long term financing,
dissolution of the business in even of owner death
Partnership - Ans--a business relationship between two or more persons
who join to carry on a trade or business. each person contributes money,
property, labor, or skill, and each partner expects to share in the profits and
losses of the business.
Two types of partnership - Ans--general and limited
Advantages of a General Partnership - Ans--ease of formation, direct profit
rewards, larger management base than that of a sole proprietorship
Disadvantages to a General Partnership - Ans--unlimited liability, potential
for disagreements, lack of continuity, difficulty in withdrawing from a
partnership
C Corporation - Ans--a legal business entity that has independent
ownership of assets and liabilities from its shareholders
Requirements of C Corporation - Ans--board of directors and corporate
officers, stockholders as owner of the company, board meetings, board
empowered to authorize certain actions
, Advantages of a C Corporation - Ans--separate legal entity, limited liability
for stockholders, unlimited life of the business, availability of capital
resources, transfer of ownership though stock
Disadvantages to a C Corporation - Ans--complex and expensive
organization, limitations on corporations activities and decisions by the
corporate charter, extensive record keeping and regulation, double taxation
S Corporation - Ans--a legal business entity formed under the rules of
Subchapter S of the Internal Revenue Code. It is taxed like a partnership by
passing items of income, loss, deduction, and credits through to its
shareholders to be included on their separate returns
Requirements for S Corporation - Ans--one class of stock, no more than
100 shareholders who are citizens or legal residents of US, filing of IRS
Form 2553
Limited Liability Company (LLC) - Ans--a legal business entity that has
characteristics of both sole proprietorships and corporations. Federal
income taxes are paid only on income distributed to members as ordinary
income. Member have protection from liability for actions taken by the
company or by other members of your company but are not protected from
liability for personal actions.
Advantages of a LLC - Ans--limited disclosure of owners, limited
documentation, no advance IRS filings, no public disclosure of finances,
limited liability for managers and members, ability to delegate management
to non members
Joint Venture - Ans--generally formed on a project basis in order to integrate
positive attributes and resources of to or more companies
Purpose of Licensing - Ans--protects the health, safety, and welfare of the
public
Tennessee Board of Licensing Contractors - Ans--regulates contracting
activities through examination, licensure, and disciplinary
