Chapter 3 Hospitality Business Structures

1) In the limited partnership, the limited partner has unlimited liability. a. True b. False

2) A sole proprietorship is the most complex of organizational structures. a. True b. False

3) With a C corporation, the company is liable for taxes on the corporations profits and

shareholders are liable for taxes.

a. True b. False

4) The conduct of individual employees has a direct effect on the liability of business. a. True b. False

5) All tying arrangements are illegal. a. True b. False

6) Which of the following organizational structures is least desirable from a liability perspective? a. Limited partnership b. General partnership c. S corporation

d. Limited liability company

7) A type of business entity that offers liability protection to all owners and is exempt from taxation

on its profits is?

a. Sole proprietorship b. C corporation c. S corporation d. Limited partnership

8) The fees charged by management companies to operate a hotel very, but commonly range

between 1 and 5 percent of the hotels monthly revenue.

a. True b. False

9) REIT must pay corporate income tax and state income tax. a. True b. False

10) Owner-operator is a type of operating structure in which owners of a business are directly

responsible for its day-to-day operation. Also known, in some cases, as an independent.
a. True b. False