Question 1

Disadvantages to transacting business as a sole proprietorship include

Accepted Answer

A)   double taxation of the sole proprietor's income.
B)   personal liability for the debts and obliga- tions of the business.
C)   the limited duration of the sole proprietor- ship allowed by state law.
D)   costly filing fees for forming the sole proprietorship.E) A) and D)
F) B) and D)

Question 2

Sole proprietorships are created and governed by state statute.

Accepted Answer

A) True 
 B)False

Question 3

The income of sole proprietorships in the United States is

Accepted Answer

A)   greater than the income of corporations.
B)   less than the income of corporations.
C)   less than the income of partnerships.
D)   about the same as the income of corpora- tions.E) B) and C)
F) C) and D)

Question 4

A sole proprietor may hire any number of employees.

Accepted Answer

A) True 
 B)False

Question 5

A certificate of assumed name is filed to

Accepted Answer

A)   form a sole proprietorship.
B)   form an assumed-name entity.
C)   create a trademark.
D)   give notice of your intent to transact busi- ness under a name other than your own.E) All of the above
F) A) and B)

Question 6

When hiring an employee, the sole proprietor must

Accepted Answer

A)   file a certificate of assumed name.
B)   file a notice with the secretary of state or other appropriate state official.
C)   obtain a federal employer identification number.
D)   amend the business's certificate of assumed name.E) B) and C)
F) All of the above

Question 7

The application for employer identification number must be filed with the

Accepted Answer

A)   secretary of state.
B)   State Unemployment Insurance Department.
C)   Internal Revenue Service.
D)   U.S. Department of Labor.E) A) and C)
F) A) and D) C

Question 8

A sole proprietor may delegate management and decisions concerning the business to agents and employees.

Accepted Answer

A) True 
 B)False

Question 9

A sole proprietorship is considered to be

Accepted Answer

A)   an entity formed to protect the small busi- nessperson from personal liability.
B)   an extension of the individual sole pro- prietor.
C)   any business organization that is owned, managed, and operated by only one individual.
D)   an entity that is easily transferred from one individual to another.E) All of the above
F) B) and C)

Question 10

The rules of ethics that apply to attorneys may apply to the paralegals who work for them.

Accepted Answer

A) True 
 B)False

Question 11

The number of sole proprietorships in the United States is

Accepted Answer

A)   greater than the number of corporations.
B)   less than the number of corporations.
C)   less than the number of partnerships.
D)   about the same as the number of partner- ships.E) A) and B)
F) A) and C)

Question 12

The sole proprietorship is dissolved by filing a certificate of dissolution with the secretary of state.

Accepted Answer

A) True 
 B)False

Question 13

The sole proprietor's liability for the actions of his or her employee is best described as which of the following:

Accepted Answer

A)   A sole proprietor is never responsible for torts committed by the sole proprietor's employee.
B)   A sole proprietor is responsible for actions taken by an employee while the employee is acting on behalf of the employer in the normal course of business.
C)   Both the sole proprietor and the employee may be liable for torts committed by the employee.
D)   Both B and C.E) B) and C)
F) None of the above

Question 14

Advantages to transacting business as a sole proprietorship include

Accepted Answer

A)   double taxation on the income of sole proprietors.
B)   limits on the sole proprietor's personal liability.
C)   the ease and low cost of starting the business.
D)   the sole proprietor's lack of responsibility for actions by employees or agents.E) None of the above
F) A) and C)

Question 15

When a sole proprietor uses an assumed name, some states require that a notice of intent to transact business under an assumed name be published.

Accepted Answer

A) True 
 B)False  True

Question 16

A sole proprietorship certificate must be obtained from the secretary of state's office before a sole proprietor can begin transacting business.

Accepted Answer

A) True 
 B)False  False

Question 17

A sole proprietor may transfer his or her business to another individual by selling all of his or her shares of stock to that individual.

Accepted Answer

A) True 
 B)False

Question 18

Sole proprietors can attract new employees by offering shares of their business as compensation.

Accepted Answer

A) True 
 B)False

Question 19

Paralegals who are assisting in providing services to a sole proprietorship should not

Accepted Answer

A)   advise the sole proprietor with regard to the income tax consequences of doing business as a sole proprietor.
B)   assist with the preparation of state and fed- eral forms to comply with state and federal taxation requirements.
C)   draft and file an application for a certificate of assumed name when that document is required.
D)   draft and file an application for employer identification number when that document is required.E) All of the above
F) A) and C)

Exam 2: Sole Proprietorships

Disadvantages to transacting business as a sole proprietorship include

Correct Answer
verified

Sole proprietorships are created and governed by state statute.

Correct Answer
verified

The income of sole proprietorships in the United States is

Correct Answer
verified

A sole proprietor may hire any number of employees.

Correct Answer
verified

A certificate of assumed name is filed to

Correct Answer
verified

When hiring an employee, the sole proprietor must

Correct Answer
verified

The application for employer identification number must be filed with the

Correct Answer
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C

A sole proprietor may delegate management and decisions concerning the business to agents and employees.

Correct Answer
verified

A sole proprietorship is considered to be

Correct Answer
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The rules of ethics that apply to attorneys may apply to the paralegals who work for them.

Correct Answer
verified

The number of sole proprietorships in the United States is

Correct Answer
verified

The sole proprietorship is dissolved by filing a certificate of dissolution with the secretary of state.

Correct Answer
verified

The sole proprietor's liability for the actions of his or her employee is best described as which of the following:

Correct Answer
verified

Advantages to transacting business as a sole proprietorship include

Correct Answer
verified

When a sole proprietor uses an assumed name, some states require that a notice of intent to transact business under an assumed name be published.

Correct Answer
verified
True

A sole proprietorship certificate must be obtained from the secretary of state's office before a sole proprietor can begin transacting business.

Correct Answer
verified
False

A sole proprietor may transfer his or her business to another individual by selling all of his or her shares of stock to that individual.

Correct Answer
verified

Sole proprietors can attract new employees by offering shares of their business as compensation.

Correct Answer
verified

Paralegals who are assisting in providing services to a sole proprietorship should not

Correct Answer
verified

Exam 2: Sole Proprietorships

Disadvantages to transacting business as a sole proprietorship include

Correct AnswerverifiedShow Answer

Sole proprietorships are created and governed by state statute.

Correct AnswerverifiedShow Answer

The income of sole proprietorships in the United States is

Correct AnswerverifiedShow Answer

A sole proprietor may hire any number of employees.

Correct AnswerverifiedShow Answer

A certificate of assumed name is filed to

Correct AnswerverifiedShow Answer

When hiring an employee, the sole proprietor must

Correct AnswerverifiedShow Answer

The application for employer identification number must be filed with the

Correct AnswerverifiedC

A sole proprietor may delegate management and decisions concerning the business to agents and employees.

Correct AnswerverifiedShow Answer

A sole proprietorship is considered to be

Correct AnswerverifiedShow Answer

The rules of ethics that apply to attorneys may apply to the paralegals who work for them.

Correct AnswerverifiedShow Answer

The number of sole proprietorships in the United States is

Correct AnswerverifiedShow Answer

The sole proprietorship is dissolved by filing a certificate of dissolution with the secretary of state.

Correct AnswerverifiedShow Answer

The sole proprietor's liability for the actions of his or her employee is best described as which of the following:

Correct AnswerverifiedShow Answer

Advantages to transacting business as a sole proprietorship include

Correct AnswerverifiedShow Answer

When a sole proprietor uses an assumed name, some states require that a notice of intent to transact business under an assumed name be published.

Correct AnswerverifiedTrue

A sole proprietorship certificate must be obtained from the secretary of state's office before a sole proprietor can begin transacting business.

Correct AnswerverifiedFalse

A sole proprietor may transfer his or her business to another individual by selling all of his or her shares of stock to that individual.

Correct AnswerverifiedShow Answer

Sole proprietors can attract new employees by offering shares of their business as compensation.

Correct AnswerverifiedShow Answer

Paralegals who are assisting in providing services to a sole proprietorship should not

Correct AnswerverifiedShow Answer

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C

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True

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False

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