$$\text{Survival Rate} = \frac{\text{Number of businesses surviving after n years}}{\text{Number of businesses started}} \times 100$$

Question 1

Which of the following best describes a micro-enterprise in Canada?

Accepted Answer

A business with 1-4 employees.

Question 2

What is the main advantage of a sole proprietorship compared to other forms of business ownership?

Accepted Answer

Ease of starting and ending the business.

Question 3

Which of the following is a disadvantage of partnerships?

Accepted Answer

Unlimited liability shared among partners.

Question 4

A corporation is considered a separate legal entity. What does this mean for its owners?

Accepted Answer

Owners have limited liability for the corporation's debts.

Question 5

Which of the following is NOT an advantage of franchising?

Accepted Answer

Large start-up costs.

Question 6

If a person is discharged from bankruptcy in Canada, how long does the bankruptcy remain on their credit record?

Accepted Answer

6 years after discharge.

Question 7

Which type of business ownership is most likely to have 'double taxation' as a disadvantage?

Accepted Answer

Corporation.

Question 8

What is the primary difference between a public corporation and a private corporation?

Accepted Answer

Public corporations issue shares to the public; private corporations do not.

Question 9

Which of the following is a key challenge for home-based businesses?

Accepted Answer

Managing risk, taxes, and paperwork.

Question 10

A limited partner in a partnership:

Accepted Answer

Has no management responsibility and limited liability.

Question 11

Which of the following is NOT a typical way to enter small-business operations?

Accepted Answer

Start as a public corporation.

Question 12

Which of the following is a feature of co-operatives?

Accepted Answer

One member/one vote system.

Question 13

What is the main reason for the growth in non-employer businesses in Canada after COVID?

Accepted Answer

Hiring became riskier.

Question 14

Which of the following is a disadvantage of corporations?

Accepted Answer

High initial costs.

Question 15

Which formula would you use to calculate the survival rate of businesses over time?

Accepted Answer

$$	ext{Survival Rate} = \frac{	ext{Number of businesses surviving after n years}}{	ext{Number of businesses started}} 	imes 100$$

Question 16

Which of the following is NOT a component of a typical business plan?

Accepted Answer

Articles of Incorporation.

Question 17

Which type of corporation is only registered by the provincial or federal government?

Accepted Answer

Crown corporation.

Question 18

What is the main purpose of business regulations in Canada?

Accepted Answer

To ensure company names are unique and taxes are paid.

Question 19

Which of the following is a real-world application of limited liability?

Accepted Answer

A shareholder in a corporation loses only the amount invested if the company goes bankrupt.

Question 20

If a Canadian business owner wants to forecast monthly cash flow for 24 months, which financial projection should they use?

Accepted Answer

Month-to-month cash flow forecast.

Forms of Business Ownership and Small Business Operations in Canada

Study Guide - Practice Questions