Principles of Business and Finance
6200/6600
Essential
Standard#
Objective #
Unit A
Essential
Standard
2.00
PBF2.01
PBF2.02
PBF2.03
PBF2.04
PBF2.05
Unit Titles/Essential Standards and Objective
Statement
Principles of Business
Understand the nature of business.
Local Use
Course
Weight
24%
Understand the types of business ownership.
Understand leadership and management.
Understand production and operations.
Understand applications and issues of technology.
Understand responsible actions of conducting
business
5%
5%
5%
4%
5%
Essential Standard 2.00 will help students understand the nature of business that
will cover the types of business ownership, leadership and management, the production
and operations, applications and issues of technology, and lastly responsible actions of
conducting business. In objective 2.01 students will understand the characteristics of
the types of businesses. In objective 2.02 students will learn how management
functions, levels, and styles are classified. In addition students will learn about the
classification of leadership styles and activities of human resources management. In
objective 2.03 students will learn about the types of business production, difference
among manufacturing procedures, the classification of production planning and
manufacturing procedures. Lastly, students will understand why it is important for
businesses to plan business operations. In objective 2.04, students understand the
business use of technology and the common concerns of businesses using technology.
In objective 2.05 students will learn how businesses are socially responsible and how
the government protects businesses, individuals, and workers while they are conducting
business. Also students will understand how the Consumer Bills of Rights protects
consumers and government actions for regulating and assisting businesses.
6200/6600 Principles of Business and Finance
Summer 2010
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Course
Essential
Standard
Objective
Essential
Questions
6200/6600 Principles
Unit A
of Business and
Finance
2.00
B2 24%
Principles of Business
Understand the nature of
business.
2.01
B2 5%
Understand the types of
business ownership.
 What are the types of business ownership?
 What are the characteristics of the different types of business
ownership?
UNPACKED CONTENT
I. Main Types of Business Ownership Table
Type
Sole Proprietorship
Partnership
Owner(s)
One person
Two or more people
Manager(s)
May be owner
Formation
Begin buying and
selling goods or
services, plus may
vary by states
1. Easy to form
2. Complete control of
business
3. Recipient of 100%
of the profit
4. One time taxation
1. Limited capital
2. Unlimited liability
3. Limited lifetime of
owner
Advantages
Disadvantages
Determined by
partnership
agreement
Vary by states
1. More capital and
credit available
than a sole
proprietorship
2. Work load shared
3. Losses shared
1. Profits shared
2. Decisions made
jointly
3. Unlimited liability
depending on
partnership type
6200/6600 Principles of Business and Finance
Summer 2010
Corporation
One or more
shareholders, who
has one vote per
share
Managers, board of
directors, and
shareholders
Filing of an article of
incorporation with
state government
1. Capital easy to
obtain
2. Limited liability for
shareholders
3. Possibility unlimited
lifetime
1. Double taxation:
profits and
earnings
2. Government
regulations
3. Operations
controlled by
shareholders and
board of directors
instead of original
owner(s)
Page 78
Type
Liabilities
Examples of
liabilities
Termination
Source(s) of
investment
Examples of
business
ownership
Sole Proprietorship
1. Employment
2. Accidents and
injuries on
premises
3. Company vehiclerelated
4. Product-related
5. Errors and
omissions
Partnership
1. Employment
2. Accidents and
injuries on
premises
3. Company vehiclerelated
4. Product-related
5. Errors and
omissions
Corporation
1. Employment
2. Accidents and
injuries on
premises
3. Company vehiclerelated
4. Product-related
5. Errors and
omissions
6. Directors and
officers
1. Employment: Manager fires an employee that missed significant
days from work.
2. Accidents and injuries on premises: Customer breaks a leg while
on business property.
3. Accidents and injuries on premises: Driver runs into a building
while driving company’s car.
4. Product-related: Toddlers are easily injured by a sharp edge of a
toy.
5. Errors and omissions: Employee accidentally damages a
customer’s property.
6. Directors and officers: One food ingredient that may cause cancer
is intentionally omitted from package.
Decision or life of
Actions of the
Determined by charter
owner
partners,
or unlimited lifetime
bankruptcy, death,
and/or court order
Personal, gifts,
Personals of
Purchase of stocks
borrowed, and others
partner(s), gifts,
may vary
borrowed, and others
may vary
Answers will vary.
 South Railroad
 Bank of America
Limited Partnership
Corporation
 Eden Limited
 Lowe’s Home
Partnership
Improvement Store
II. Other types of business ownership
A. Specialized partnership
Limited liability partnership
B. Types of partnerships
1. Dormant partner
2. General partner
3. Secret partner
4. Silent partner
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Summer 2010
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C. Specialized corporations
1. Subchapter/S-corporation
2. Limited liability company
3. Nonprofit corporation
D. Types of corporations
1. Domestic
Example: SAS Institute, Inc.
2. Foreign
Example: 1-800-flowers.com
3. Alien
Example: Toshiba
4. Public
5. Private
E. Cooperatives
F. Franchise formats
1. Business-format franchise
2. Product trade-name franchise
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Summer 2010
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INSTRUCTIONAL ACTIVITIES
1
2
Types of Business Ownership
Introduction
 Have students read Focus on Real
Life on page 108 in Intro to
Business, 6e, Thomson SouthWestern textbook.
 Facilitate a discussion using these
questions:
1. Who is a stockholder in a
company? Does a stockholder
have influence in a company?
2. Who plans to own a business?
How many owners will be involved
and why?
Types of Business Ownership
Reading and PowerPoint Presentation
 Present an overview of the types of
business ownership.
 Facilitate students completing Types
of Business Ownership Brochure
Activity. Students may obtain
information by reading Handout of
Additional Information and pages
108-113 in Intro to Business, 6e,
Thomson South-Western textbook OR
by participating during presentation of
PowerPoint Presentation 2.01.
RELEVANCE TO
RESOURCES
OBJECTIVE
Helps students to
Textbook
begin to
UNDERSTAND (B2)
types of business
ownership
Helps students
Types of Business
UNDERSTAND (B2) Ownership Brochure
types of business
Activity
ownership
Handout of Additional
Information
Software in order to
publish Types of
Ownership Brochure
Textbook
PowerPoint
Presentation 2.01
Instructional Activities continued on the next page.
6200/6600 Principles of Business and Finance
Summer 2010
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INSTRUCTIONAL ACTIVITIES
RELEVANCE TO
OBJECTIVE
 Facilitate a discussion using these
questions:
1. Display a variety of area
businesses. NOTE: The websites
in the Resources Column may be
used to access profiles of
corporations and limited liability
partnerships located in North
Carolina.
2. Why do some businesses become
corporations while others such as
a local landscaping business may
remain as a sole proprietorship?
3. Can anyone own a McDonalds
Restaurant? How?
3
Key Terms
Facilitate completion of Types of
Business Ownership Key Terms
Crossword Puzzle.
RESOURCES
List of a variety of area
businesses that will be
used during discussion
Websites:
Access NC
corporationshttp://money.cnn.com/
magazines/fortune/
fortune500/2007/states/
NC.html
Helps students
IDENTIFY (A1) key
terms associated
with types of
business ownership
Access NC
corporations and
limited liability
partnershipshttp://www.searchsyste
ms.net/frame.php?id=c
98a87d8c77
c4593d7d80aefde9423
d6&
delay=true&nid=1048
Types of Business
Ownership Key Terms
Crossword Puzzle
Types of Business
Ownership Key Terms
Crossword Puzzle Key
4
The Best Form of Business
Helps students
Best Form of Business
UNDERSTAND (B2) Activity
 Facilitate students completing the
the appropriate type
Best Form of Business Activity.
Textbook
Use the Decision-Making Strategies of business
ownership
for
each
Activity on page 122 in Intro to
scenario
Business, 6e, Thomson SouthWestern textbook as a guide.
 Facilitate a discussion of responses to
these questions.
Instructional Activities continued on the next page.
6200/6600 Principles of Business and Finance
Summer 2010
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INSTRUCTIONAL ACTIVITIES
RELEVANCE TO
OBJECTIVE
 During the discussion, point out the
advantages and disadvantages of the
suggested types of business
ownership possible. Also, discuss any
other types of businesses that were
not mentioned.
5
Classifying Types of Business
Helps students
Ownership
CLASSIFY (B2)
types of business
 Have students complete Collection
ownership
section Portfolio Activity on page
123 in Intro to Business, 6e,
Thomson South-Western textbook.
 Have students collect a visual image
for the types of business ownership:
1. Corporation
2. Cooperative
3. Franchise
4. Nonprofit
5. Partnership
6. Sole proprietorship
NOTE: Images may include parts of
packages, pictures, or drawings.
Students may collect images from
yellow pages, newspapers, packages,
magazines, other printed material and
the internet.
 Have students organize their
collections by type of business
ownership on poster board or other
display format. The images should be
labeled by the type of ownership and
function of the business.
 Check for accuracy of images on
display. Depending on the results,
review the types of business
ownership and allow students to
correct mistakes.
 Facilitate students doing a gallery
walk of the displays.
 NOTE: This activity is a formative
assessment.
Instructional Activities continued on the next page.
6200/6600 Principles of Business and Finance
Summer 2010
RESOURCES
Textbook
Images from packages,
printed material, the
internet or drawings
provided by the
students
Place to display
collection of visual
images of types of
business ownership
Page 83
INSTRUCTIONAL ACTIVITIES
6
7
L-
Sole-Partners-Corporate
 Separate students into three groups to
represent sole proprietorships,
partnerships, or corporations OR allow
students to identify a desired type of
business ownership, and then have
them move into appropriate groups
according to choice. NOTE: Students
in the sole proprietorship group should
complete the below task individually,
and then discuss as a group.
 Facilitate groups completing SolePartners-Corporate Activity.
 Facilitate the groups as they present
findings for the scenarios to the class.
 Facilitate students reflecting a
paragraph on the following question:
After this exercise I plan to/I do not
plan to own a sole proprietorship,
partnership, or corporation because….
Supplemental
Coordinate a panel that represents as
many of the types of business ownership
as possible.
 Facilitate the panel presenting on at
least the following topics:
1. Needed skills to manage a business
2. Brief history of business as a start
up to current status
3. Advantages and disadvantages of
managing business
RELEVANCE TO
OBJECTIVE
Helps students
UNDERSTAND
(B2) how
characteristics or
potential
characteristics of
companies could
influence the actions
of owners or
potential owners
Helps students
UNDERSTAND
(B2) the types of
business ownership
RESOURCES
Sole-PartnersCorporate Activity
Sole-PartnersCorporate Activity Key
Panel of speakers
–Literacy Strategy: A gallery walk is similar to a person walking through an art gallery
looking at paintings. In the classroom, students will be looking at student work, which might be
in the form of a poster, paper, or other format. Gallery walks are most effective when the
teacher gives students a task to do as they look at other student work. For example, the teacher
might want students to take notes or give feedback to the writer(s) on a sticky note.
6200/6600 Principles of Business and Finance
Summer 2010
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Instructional Support Material
Textbook
Intro to Business, 6e, Thomson SouthWestern
Websites
Access NC corporationshttp://money.cnn.com/magazines/fortune/
fortune500/2007/states/NC.html
Access NC corporations and limited liability
partnershipshttp://www.searchsystems.net/frame.php?id=
c98a87d8c77c4593d7d80aefde9423d6&dela
y=true&nid=1048







Handouts (included)
Types of Business Ownership
Brochure Activity
Handout of Additional Information
Types of Business Ownership Key
Terms Crossword Puzzle
Types of Business Ownership Key
Terms Crossword Puzzle Key
Best Form of Business Activity
Sole-Partners-Corporate Activity
Sole-Partners-Corporate Activity Key







Other
PowerPoint Presentation 2.01 (separate
file)
Software in order to publish Types of
Business Ownership Brochure
List of a variety of area businesses that
will be used during discussion (a variety
may be obtained from the provided
websites)
Images from packages, printed material,
the internet, or drawings to be provided
by the students
Place to display collection of visual
images of types of business ownership
Panel of speakers (supplemental)
Assessment Prototypes (included)
6200/6600 Principles of Business and Finance
Summer 2010
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Handout of Additional Information
Liability is for which anything a company owes.
Specialized Partners
1. Dormant partner plays no role and is not known to the public.
2. General partner plays an active role and has unlimited liability (every partnership
must have at least one general partner).
3. Limited participate as investors and have limited liability.
4. Secret partner plays an active role but is secret from society.
5. Silent partner does not have an active role but is known to the public.
Franchise Formats
1. Business-format franchise requires franchisee to sell products or service in a specific
format.
Examples
Jackson-Hewitt Tax Services
Burger King
Firestone Tires
2. Product-trade franchise allows franchisee to sell specific products. This format is
usually formed by automobile, appliance, and petroleum product.
Examples
Marc Jacobson Toyota
Bobby’s Appliance store
Local stores selling Shell brand of gasoline
Types Corporations
1. Domestic corporations are chartered in a specific state.
2. Foreign corporations are chartered in one state but doing business in another state.
3. Alien corporations are chartered in another nation but doing business in a state.
4. Public corporations are established for governmental purposes.
5. Private corporations are established by individuals for business or charitable
purposes.
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Name_________________________ Class _________________ Date _________
2.01 Types of Business Ownership Brochure Activity
Directions: Use appropriate software to make a brochure featuring the types of business
ownerships.
Brochure Template
Describe the types of
specialized partnerships
and corporations
Name
Date
Period
Class
Title
Describe the types of
corporations
Picture
Describe cooperative
Describe franchise and the
formats
Business Quote
Corporation
Partnership
Proprietorship























How many owners?
Who manages?
How is business started?
2 Advantages
2 Disadvantages
Limited or unlimited
liability
Example
How is ownership
terminated?
Sources of investment
2 Examples-texts,
symbols, or pictures




How many owners?
Kinds of partners
Who manages?
How is business started?
2 Advantages
2 Disadvantages
Limited or unlimited
liability
Example
How is ownership
terminated?
Sources of investment
2 Examples-texts,
symbols, or pictures
6200/6600 Principles of Business and Finance




How many owners?
Who manages?
How is business started?
2 Advantages
2 Disadvantages
Limited or unlimited
liability
Example
How is ownership
terminated?
Sources of investment
2 Examples-texts,
symbols, or pictures
Summer 2010
Page 87
Name_________________________ Class _________________ Date _________
2.01 Types of Business Ownership Key Terms Crossword Puzzle
Directions: Fill in the crossword puzzle using the provided definitions.
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Summer 2010
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Types of Business Ownership Key Terms Crossword Puzzle Continued
Across
5. Two or more persons to carry on as co-owners of a business for a profit.
9. Each stock equals one _______ at the shareholder meeting.
10. Type of liability in which you can lose all your assets.
16. Formed by the way two or more people conduct their business (4 words).
17. Entity with the legal authority to act as a single person.
18. Partner has an active role, but unknown existence.
19. Grants permission to sells its products and services as a business.
Down
1. Business owned by one person (two words).
2. Partnership formed after they agree to conditions in a contract (two words).
3. Type of corporation that benefits the public and receives a tax break.
4. Abbreviation for a partnership with limited liability.
6. Partner has no role, but is known to public.
7. Type of taxation on a corporation.
8. Type of liability in which you only lose your initial investment in the company.
11. Partner plays no role and is not known to public.
12. __________ of incorporation.
13. Partner has an active role, unlimited liability.
14. Formed by a group to gain bargaining power.
15. __________venture is a special project for a limited time.
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Summer 2010
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Types of Business Ownership Key Terms Crossword Puzzle KEY
Across
5. Two or more persons to carry on as co-owners of a business for a profit.
Partnership
9. Each stock equals one _______ at the shareholder meeting. Vote
10. Type of liability in which you can lose all your assets. Unlimited
16. Formed by the way two or more people conduct their business (4 words). By proof
of existence
17. Entity with the legal authority to act as a single person. Corporation
18. Partner has an active role, but unknown existence. Secret
19. Grants permission to sells its products and services as a business. Franchise
Down
1. Business owned by one person (two words). Sole proprietorship
2. Partnership formed after they agree to conditions in a contract (two words). By
agreement
3. Type of corporation that benefits the public and receives a tax break. Nonprofit
4. Abbreviation for a partnership with limited liability. LLP
6. Partner has no role, but is known to public. Silent
7. Type of taxation on a corporation. Double
8. Type of liability in which you only lose your initial investment in the company.
Limited
11. Partner plays no role and is not known to public. Dormant
12. __________ of incorporation. Articles
13. Partner has an active role, unlimited liability. General
14. Formed by a group to gain bargaining power. Cooperative
15. __________venture is a special project for a limited time. Joint
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Summer 2010
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Name_________________________ Class _________________ Date _________
Best Form of Business Activity
Directions: Read the scenarios and provide responses in your own words to the
questions in the spaces provided.
Scenario 1
Mary makes jewelry for her own business named The Design For You. She needs help
in completing orders to make necklace and earring sets in a timely manner. Mary
prefers working alone at her own pace. Mary’s cousin named Greg has expressed
interest in starting a business too. He likes using his hands, designing things, and has
access to jewelry making tools too.
1. Should Mary hire Greg to help her make the orders for jewelry or form a partnership
with him? __________________________________________________________
2. Compare the advantages and disadvantages of hiring Greg and remaining as a sole
proprietorship.
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
3. Compare the advantages and disadvantage of forming a partnership with Greg
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
Scenario 2
Teri enjoys assisting other students with their homework. Her neighbor named Francis
volunteers in assisting younger students with their homework in an after school
program. Teri and Francis talked about forming a partnership and expanding their
services.
1. Should Teri and Francis form a partnership? _______________________________
2. Compare the advantages and disadvantages of them forming a partnership
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
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Summer 2010
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Best Form of Business Activity Continued
Jade and John own and operate several ice cream stores. Jade is interested in
expanding the business by offering additional services and opening more locations.
John reminded Jade that they will need more resources in order to expand. Jade
suggested that they offer shares to relatives to finance the expansion.
1. Should Jade and John form a corporation? ________________________________
2. Compare the advantages and disadvantages of them forming a corporation.
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
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Summer 2010
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Name_________________________ Class _________________ Date _________
Sole-Partners-Corporate Activity
Directions: Work as a sole proprietor, partnership, or corporation to provide responses
to the scenarios in the space provided. Be prepared to present your findings.
Sole Proprietorship Scenario
Mary Jones operates her own staffing agency. Mary has about 30 steady employers
that request her services to send temporary workers for various jobs. She handles all
the financial, advertising, operations, and management issues for the agency. Mary
used a gift of $10,000 from her grandmother to start the agency. She would like to
expand the agency. She uses all her profit to sustain her personal living arrangements.
After seven days of constant rain, Mary realized soon after the rainy days that water is
leaking from several places of the roof. She is planning to borrow money to have the
roof repaired.
Complete the table using information from the scenario
Type
Sole Proprietorship
Owner(s)
Manager(s)
Advantage(s)
Disadvantage(s)
Source(s) of investment
Other information
Consider the responses to the
above items, what should the
business owner do with the
business? Why?
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Summer 2010
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Name_________________________ Class _________________ Date _________
Sole-Partners-Corporate Activity
Directions: Work as a sole proprietor, partners, or corporation to provide responses to
the scenarios in the space provided. Be prepared to present your findings.
Partnership Scenario
Max and Tim enjoy skiing so much that they are thinking about opening a ski resort.
Max recently inherited about 100 acres of land in the mountains. This amount of land
will easily accommodate a ski resort. Tim has about $30,000 in his saving account.
Tim’s neighbor operates a successful business. Both of them have limited knowledge
about operating a business. They talk about offering ski slopes, equipment, housing,
food, and entertainment at the resort. Max may have to continue working his full-time
job as a teacher even once they opened the resort. Tim is ready to quit his job as an
attorney right away and start the business.
Complete the table using information from the scenario
Type
Partnership
Owner(s)
Manager(s)
Type of partners should be
considered
Advantage(s)
Disadvantage(s)
Source(s) of investment
Other information
Consider the responses to the
above items, what should they with
their resources and desire to open
the ski resort? Why?
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Summer 2010
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Name_________________________ Class _________________ Date _________
Sole-Partners-Corporate Activity
Directions: Work as a sole proprietor, partners, or corporation to provide responses to
the scenarios in the space provided. Be prepared to present your findings.
Corporation Scenario
A company wants to expand to several other cities. The board of directors proposed the
option of selling 300 more shares to obtain the funds. The company stock value has
decreased about 1% over the past year. The corporation has earned an average profit
of over $40,000 for the past three years.
Complete the table using information from the scenario
Type
Corporation
Owner(s)
Manager(s)
Advantage(s)
Disadvantage(s)
Source(s) of investment
Other information
Consider the responses to the
above items, should the company
pursue its expansion plans? Why?
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Summer 2010
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Sole-Partners-Corporate Activity Key
Directions: Work as a sole proprietor, partners, or corporation to provide responses to
the scenarios in the space provided. Be prepared to present your findings.
Sole Proprietor Scenario
Mary Jones operates her own staffing agency. Mary has about 30 steady employers
that request her services to send temporary workers for various jobs. She handles all
the financial, advertising, operations, and management issues for the agency. Mary
used a gift of $10,000 from her grandmother to start the agency. She would like to
expand the agency. She uses all her profit to sustain her personal living arrangements.
After seven days of constant rain, Mary realized soon after the rainy days that water is
leaking from several places of the roof. She is planning to borrow money to have the
roof repaired.
Complete the table using information from the scenario
Type
Sole Proprietorship
Owner(s)
Mary Jones
Manager(s)
Mary Jones
Advantage(s)
Mary handles all the financial, advertising,
operations, and management issues for the agency.
Disadvantage(s)
Unlimited liability for business-the roof needs
repairing
Source(s) of investment
$10,000 from grandmother
Other information
Answer will vary
Consider the responses to the
above items, what should the
business owner do with the
business? Why?
Answer will vary
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Summer 2010
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Sole-Partners-Corporate Activity Key
Directions: Work as a sole proprietor, partners, or corporation to provide responses to
the scenarios in the space provided. Be prepared to present your findings.
Partnership Scenario
Max and Tim enjoy skiing so much that they are thinking about opening a ski resort.
Max recently inherited about 100 acres of land in the mountains. This spread of land will
easily accommodate a ski resort. Tim has about $30,000 in his saving account. Both of
them have limited knowledge about operating a business. Tim’s neighbor operates a
successful business. They talk about offering ski slopes, equipment, housing, food, and
entertainment at the resort. Max may have to continue working his full-time job as a
teacher once they opened the resort. Tim is ready to quit his job as an attorney right
away and start the business.
Complete the table using information from the scenario
Type
Partnership
Possible owner(s)
Max and Tim
Possible manager(s)
Max and Tim
Type of partners should be
considered
Answer will vary.
Advantage(s)
Max’s 100 acres of land
Tim’s money in his saving account
Max and Tim possibly working together
Disadvantage(s)
Max and Tim’s limited knowledge in running a
business
Source(s) of investment
Max’s 100 acres of land
Tim’s money in his saving account
Other information
Answer will vary
Consider the responses to the
above items, what should they with
their resources and desire to open
the ski resort? Why?
Answer will vary
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Sole-Partners-Corporate Activity Key
Directions: Work as a sole proprietor, partners, or corporation to provide responses to
the scenarios in the space provided. Be prepared to present your findings.
Corporation Scenario
It Fits Corporation wants to expand to several other cities. The board of directors
proposed the option of selling 3000 more shares to obtain the funds. The clothing stores
stock value has decreased about 1% over the past year. The corporation has earned an
average profit of over $40,000 for the past three years.
Complete the table using information from the scenario
Type
Corporation
Owner(s)
Shareholders
Manager(s)
Managers, board of directors, and shareholders
Advantage(s)
Capital possible easily available if 3000 more
shares are sold.
Disadvantage(s)
Double taxation will take place for the profits and
earnings of $40,000.
Source(s) of investment
Possibility of the purchase of 3000 more shares of
stock
Other information
Answer will vary.
Consider the responses to the
Answer will vary.
above items, what should the
corporation do about their
expansion plans? Why?
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Summer 2010
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ASSESSMENT PROTOTYPES
Note: These assessment prototypes are examples of the types of items included in the
item bank. All items are comparable to the cognitive process of the understand verb.
Questions require students to demonstrate that they understand the content.
Assessment prototypes will not be used on the secured test, but questions in similar
formats will be used.
A company sold 500 shares of stock and still relies on a central body of people for
financial directions. This is an example of what type of business?
A.
B.
C.
D.
Cooperative
Corporation
Partnership
Sole Proprietorship
ANSWER: B
Joe invested $500,000 into his sole proprietorship. He lost a $1 million lawsuit and does
not have any liability insurance. As a result of the lawsuit, how much will he have to
pay?
A. $0
B. $500,000
C. $750,000
D. $1,000,000
ANSWER: D
Wendy is free of obligation of a role in her business and is an unknown partner, but she
collects some of the profits each month. This is an example of what type of partner?
A. Dormant
B. Limited
C. Silent
D. Secret
ANSWER: A
Mary works alone in her catering business and enjoys scheduling her daily routine. She
is experiencing which advantage of a sole proprietorship over a corporation?
A. Owner control of decisions
B. Owner limited life
C. Owner recipient of 100% of the profit
D. Owner unlimited liability
ANSWER: A
6200/6600 Principles of Business and Finance
Summer 2010
Page 99