Entrepreneurship and Small Business (ESB) Certification Practice Exam

Which roles typically hold equity in a business?

1. Employee, Manager, Intern

2. Partner, Stockholder, Owner

3. Consultant, Contractor, Advisor

4. Consumer, Vendor, Affiliate

The correct answer is: Partner, Stockholder, Owner

Equity in a business refers to ownership in the company, which often comes with the potential for financial returns based on the company's performance. Typically, individuals or groups that invest in or have a stake in the company hold equity. In the context of the business environment, partners, stockholders, and owners are all roles that directly involve ownership or investment in a company. Partners contribute capital and share in the profits, stockholders have purchased shares which represent ownership in the company, and owners have a significant stake in their own ventures. Each of these roles implies a commitment to the business and a vested interest in its success, which is represented in actual ownership through equity. In contrast, other roles such as employees, managers, interns, consultants, contractors, advisors, consumers, vendors, and affiliates typically do not hold equity in the business. They may be compensated through salaries, fees, or other forms of remuneration, but they do not possess ownership rights or stake in the company's financial performance. Understanding these distinctions is essential for recognizing how different stakeholders interact with and contribute to a business.