business ch4

Corporation

A business that is owned by many investors.

Which of the following statements about the partnership as a form of business ownership is true?

Formation of the partnership is simple.

Advantages of a corporation

Limited liability Unlimited life Separation of ownership and management Transfer of ownership is easy Easier to raise capital

What does a corporation have?

Limited liability; ease of transferring ownership; ability to attract financing

Advantages of Sole Proprietorship

Owner receives all profits; Low organizational costs; Income taxed as personal income of proprietor; Independence; Secrecy; Ease of dissolution

Sole Proprietorship

a business owned and managed by a single individual

Partnership

a business owned by two or more people

A group of cotton growers in North Georgia and North Alabama pooled their resources to build a cotton gin and storage area for the ginned cotton. They marketed their cotton to textile mills under one label. This collective ownership organization is a:

cooperation

Who owns a corporation?

everyone who owns a share of stock in the corporation

Advantages of Partnership

more expertise-load is spread more people take on more jobs easier to raise capitol specialisation -more skills = higher customer satisfaction=higher word of mouth promotion =better decision making more ideas

Stewed Tomatoes was an "all-girl power-pop trio." Its three members realized that many musicians feel stifled when making music in a sterile studio environment while the clock ticked away expensive hours, so the three girl band members created Materville Studios, a multimedia production house and recording studio in downtown Chicago. They share work responsibilities and profits equally. Materville Studios is a(n):

partnership

Regarding sole proprietorships, partnerships, and corporations, which business organization form has the smallest number of firms?

partnerships

The form of business ownership that has the most difficulty in raising capital is the:

sole proprietorship

One reason franchising is popular today is that it provides a low risk way to get into a business that is taking advantage of demographic trends such as fitness franchises and senior care.

true

cooperation

working together for the good of all