chapter 4 BA

general partnership

A partnership where all owners share in operating the business and in assuming unlimited liability for the business's debts is a:

articles of incorporation and bylaws

A corporation is formally formed with:

franchise

Financial advice and a nationally recognized name are both benefits of owning a(n) _______.

acquisition

One company's purchase of the property and obligations of another company is a(n) ________.

merger

The result of two firms joining to form one is called a(n):

personal

Unlimited liability as it relates to sole proprietorships is the risk of loss of ________ assets beyond the assets of the business.

Recognized name Lower failure rate Financial advice

What are some of the advantages of franchising?

-Cost of forming a corporation -Double taxation

What are some of the disadvantages of a corporation?

Choice of taxation Flexible ownership rules Limited liability

What are the advantages of the LLC form of organization?

false

True or false: If producers, consumers, or workers with similar needs pool their resources for mutual gain, they have created a franchise.

a fellow franchisee does something that has an impact on growth and profitability

A franchise owner will experience the coattail effect when:

overhead

A key advantage of a home-based franchise is low _______ costs, which can be ongoing. These are the costs associated with rent, utilities, and other fixed costs.

-the worth of a retiring partner's share -when a partner can retire -how to distribute assets

Ending a partnership can be difficult because of problems deciding:

vertical

A merger between a soft drink company and an artificial sweetener maker could be considered a(n) __________ merger.

boss

Many people do not like working for someone, so being your own ________ is an advantage of sole proprietorships.

Double Taxation Initial Cost Extensive paperwork

Which are considered disadvantages of incorporating?

agreement

A partnership _________ can spell out the requirements of terminating a partnership.

corporation

A state-chartered legal entity with authority to act and have liability separate from its owners is a:

S

A unique government creation that looks like a corporation but is taxed like a sole proprietorship or partnership is called a(n) _______ corporation.

technology websites e-commerce

Many brick and mortar franchisees are using ______ to expand their businesses online to lower costs and better meet the needs of their customers.

false

True or false: Partnerships are less likely to survive than sole proprietorships. True false question.

Limited liability

Which is an advantage of the corporate form of business ownership?

there are large new markets available

Many franchises are expanding internationally because:

Limited liability Flexible ownership rules Choice of taxation

Which of these are advantages of a limited liability companies?

unlimited liability

In a sole proprietorship, any debts or damages incurred by the business are your personal debts and you must pay them. This disadvantage is known as:

Corperation

__________ is a state-chartered entity that exists in the eyes of the law and controls risk to the owners of the firm.

limited

A ________ partnership has partners who do not share in operating the business.

cooperative

A business owned and controlled through pooled resources by the people who use it is a(n) ______.

LLC

A company similar to an S corporation but without the special eligibility requirements is an:

limited liability

A form of business ownership that provides limited liability, as in a corporation, but is taxed like a partnership is a(n) ________ _________ company.

partnership

A legal form of business with two or more owners is a(n): Multiple choice question.

double

A major disadvantage of the corporate form deals with the tax situation called ___________ taxation.

vertical

A merger that joins two companies involved in different but related levels of an industry is a(n) ______ merger.

an S corporation

A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships is:

partnership

An LLC submits a written operating agreement, similar to a(n) __________ agreement, describing how the company is to be operated.

survival

An advantage of partnerships is a longer _______ rate than sole proprietorships, because they become more disciplined and the business's life is based on all the partners.

franchise agreement

Ed has decided to purchase and follow a business format by becoming a franchisee. The ______ ______ he will sign gives him the right to use the business name and sell the products of the firm.

-some offer financial support to aspiring business owners -they provide personal ownership of a business

Franchises are attractive to minority populations because:

franchisees

Franchisors often use technology to meet the needs of both their customers and their _____ because technology makes communication faster and more widespread.

technology

Gathering leads on a company website, selling products and keeping up to date on news via email, and chat rooms all serve as examples of using ______ to assist franchisees and customers.

conglomerate

If a software company and a snack food company merged, it would be called a(n) _________ merger.

liability

In a general partnership, all partners share the responsibility for operating the business and assume _________ for the business's debts.

bylaws

In addition to the articles of incorporation, a corporation has_________, which describe how the firm is to be operated from both legal and managerial points of view.

hold annual meetings keep minutes file written resolutions

LLCs do have to submit articles of organization and an operating agreement, but do not have to:

boss

Many people do not like working for someone, so being your own_________ is an advantage of sole proprietorships.

acquisition

One company's purchase of the property and obligations of another is called a(n):

finds it easier to start and end the business

One of the most important advantages of the sole proprietor form of ownership is that a business owner: Multiple choice question.

there is no brick-and-mortar real estate cost.

One of the most notable advantages of an online franchise is

1. Owners/stockholders elect board of directors 2. Board of Directors hire officers of the corporation 3. Officers hire managers of the corporation 4. Managers hire employees

Rank the order in which members of a corporation are chosen in order to separate ownership from management. Start at the top of the managerial hierarchy. (Fig. 5.4)

Home-based

Relief from the stress of commuting, extra time for family activities, and low overhead expenses are all advantages of ______ - ______ franchises.

separate

Stockholders are _______ from the managers and employees of the firm because they are not actively involved in the operations of the firm.

limited liability

Stockholders' liability for losses only up to the amount they invest is called ______________.

limited partner

Taryn and Eilysh have decided to form a partnership. Taryn will not have management responsibility, but will invest money in the business. Taryn will be considered a(n) _____ partner.

partnership

Termination of a partnership is difficult without a(n) ______ agreement.

-corporate liability is separate from owners -it is state chartered -it is a legal entity

The attributes of a corporation include that:

unlimited liability

The disadvantage of sole proprietorships is that any debts or losses incurred by the business are your debts because you and the business are legally one and you have:

horizontal

The joining of two firms in the same industry is a(n) _______ merger.

false

True or false: If you and a friend start a business together, you have started a sole proprietorship.

flase

True or false: In a limited partnership, the liability of the limited partners is unlimited and personal assets are at risk.

merger

When two firms join together to form one new company, it is called a(n)___________.

Minority

_____ owned businesses are growing at more than the national rate.

-online franchisees can compete in world markets -no upfront fee may be required -franchisees pay only a set monthly fee

An advantage of starting an online franchise is that:

limit individual responsibility for losses

An advantage of the corporate form of business is that limited liability allows it to:

franchise

An agreement that gives a business the right to use a business's name and sell a product or service in a given area is a(n):

the coattail effect

Because of the poor publicity at a fellow franchise location, you notice that sales at your location have decreased. The impact of the poor publicity on your company is referred to as

a major advantage

Because owners are only responsible for losses up to the amount they have invested in a corporation, limited liability is considered:

unlimited

When you own a sole proprietorship you and the business are considered one, so you have ________ liability for financial obligations such as debt.