Question 1

Discuss the main advantages of an LLC over an S-Corp.

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Question 2

Identify the four important considerations/strategies in recruiting and assembling an effective team and organizational culture outlined in the text.

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Question 3

The difference between a board of directors and a board of advisors is that:

Accepted Answer

The board of advisors typically meets less frequently than a board of directors, as their role is more about providing advice and guidance rather than governance and decision-making.

Question 4

Identify the nine areas an entrepreneur should consider in choosing a legal form of organization.

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Question 5

What are the main characteristics of an LLC

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Question 6

The design of the organization will be the entrepreneur's formal and explicit indication to the members of the organization as to what is expected of them.Typically these expectations can be grouped into five areas,identify and describe them.

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Question 7

Discuss the advantages and disadvantages of an S-Corporation.

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Question 8

Compensation for board members can take the form of all of the following except:

Accepted Answer

Perks such as vacations may be offered as a form of compensation for executives, but typically not for board members. Board member compensation typically includes stock, stock options, and/or cash payments.

Question 9

Discuss the six main functions of a board of directors.

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Question 10

The ________ imposes oversight responsibilities on members of the board of directors.

Accepted Answer

Sarbanes-Oxley (also known as the Public Company Accounting Reform and Investor Protection Act) is a federal law passed in response to high-profile financial scandals such as Enron and WorldCom. It imposes strict oversight and accountability requirements on companies and their boards of directors, including the establishment of audit committees to oversee financial reporting and the requirement for CEOs and CFOs to certify the accuracy of financial statements.

Question 11

A board of directors should not:

Accepted Answer

A board of directors should not have members with unlimited terms as it can lead to lack of diversity, fresh perspectives, and accountability. Regular rotation of board members promotes accountability and prevents complacency.

Quiz 9: The Organizational Plan