Chapter 5 marketing book reading questions
What is the order in which members of a corporation are chosen in order to separate ownership from management?
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
The advantages of becoming a sole proprietorship include
Being your own boss
One company's purchase of the property and obligations of another company is a
Acquisition
Many people do not like working for someone, so being your own _______ is an advantage of sole proprietorships.
Boss
What are considered disadvantages of incorporating?
Double taxation Initial cost Extensive paperwork
True or false: if you and a friend start a business together, you have started a sole proprietorship.
False
An advantage of a sole proprietorship is
Independent decision making
LLCs are considered to have operational flexibility because while they must submit articles of organization, they are not required to:
Keep minutes or hold annual meetings.
Leaving a _____ means owners can leave an ongoing business for future generations
Legacy
When there is one or more general partners and one or more limited partners, the firm is a:
Limited partnership
Items considered fringe benefits that people working for a company are likely to receive, but a sole proprietor has to develop on his own are:
No paid health insurance No paid disability insurance No pension plan No sick leave No vacation pay
Unlimited liability as it relates to sole proprietorships is the risk of loss of _______ assets beyond the assets of the business.
Personal
A unique government creation that looks like a corporation but is taxed like a sole proprietorship or partnership is called a ______ corporation
S
The responsibility of the owner of a sole proprietorship for all of the debts of the business is ________ liability
Unlimited
What is considered a disadvantage of a sole proprietorship?
Unlimited liability
When two firms operating in different stages of related businesses join, it is called a _______ merger.
Vertical
a legal entity with authority to act and have liability apart from its owners is a:
corporation
A sole proprietorship has a limited life span unless:
it is sold to someone else it is taken over by an heir