131 Review Questions
Chapter 14 Review Questions
1. What are the key differences between the potential life of a business that is formed as a sole proprietorship and that of a business set up as a corporation?
2. What are the most common types of firms that are organized as limited liability partnerships?
3. What advantages does a sole proprietorship offer?
4. What are major disadvantages of a sole proprietorship?
5. If a company wishes to limit the liability of some of its investing partners, what form of business might it consider? Explain briefly.
6. In order to form a corporation, what is the most important document required?
7. What is the difference between a shareholder and a stakeholder?
8. What group within a corporation has the primary responsibility for protecting the interests of shareholders?
9. What is corporate governance?
10. What role does a corporation’s board of directors play in corporate governance?
11. Briefly explain the concept of corporate governance.
12. What is the key component of agency theory, and why might this be more important to a public company than to one that is privately held?
Attribution:
This chapter is from “Principles of Finance” https://openstax.org/books/principles-finance/pages/1-why-it-matters by Dahlquist and Knight. This book is licensed under the CC-BY 4.0 license. 2022 OpenStax.
