MGMT 159 - Ch 5 SmartBook

What are two advantages of the corporate form of business?

Ability to raise more money for investment, Limited liability

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

LLC

In a franchise, having management support from the franchisor is a(n) whereas the coattail effect is considered a .

advantage,, disadvantage,

An advantage of the separation of ownership from management in corporations is that the company can raise money from investors but the investors Blank______.

are not involved in daily operations

A corporation is formally formed with Blank______.

articles of incorporation and bylaws

Having more resources is an advantage of partnerships, so there is more money and credit available to the business.

financial

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) Blank______.

franchise

Many minority business owners prefer the Blank______ form of business ownership because it offers business connections and support.

franchise

Mark, Cal and Aidan have decided to form a business where all owners will share in operating the business and in assuming liability for the business debts. They are most likely forming a(n) partnership.

general

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

liability

An S corporation has the liability protections of a corporation but is taxed Blank______.

like a partnership or sole proprietorship

A form of business ownership that provides limited liability, as in a corporation, but has no special eligibility requirements is a(n) Blank______.

limited liability company

If you start and manage a landscaping business on your own, you have likely started a Blank______.

sole proprietorship

The easiest type of business entity to form is a

sole proprietorship

What are two reasons that franchises are attractive to minority populations?

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

Shareholders are not liable for the debts of a corporation beyond the money they invest in it by buying company .

stock

The responsibility of the owner of a sole proprietorship for all of the debts of the business is liability.

unlimited

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

boss,

What two items are delineated in a franchise agreement?

the right to sell a business' products in a given territory, the right to use a specific business' name

For a business to grow, prosper, and create economic opportunity, many people have to be willing to invest money in it. An advantage of a corporation is its ability to raise money through Blank______.

the sale of stock

Many franchises are expanding internationally because Blank______.

there are large new markets available

Which country is the most popular target for U.S.-based franchises to enter the global market?

Canada

Which are attributes of a conventional corporation? (Check all that apply)

Corporate liability is separate from owners., it is a legal entity., it is state chartered.

What are two of the disadvantages of a corporation?

Cost of forming a corporation, Double taxation

Which are considered disadvantages of incorporating?

Extensive paperwork, Initial Cost, Double Taxation

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

False

Which of following are true about the advantages and disadvantages of being a franchise owner

Having a nationally recognized name for your business in a franchise can help with marketing and awareness, While the upfront costs of a franchise may be steep, a franchise has a better chance of succeeding than starting a business from scratch

Which of following are true about the advantages and disadvantages of being a franchise owner:

Having a nationally recognized name for your business in a franchise can help with marketing and awareness, While the upfront costs of a franchise may be steep, a franchise has a better chance of succeeding than starting a business from scratch

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

Limited liability

While your are still your own boss as a franchise owner, your territory or selling boundaries may be regulated by the franchisor.

True

Because of the difficulty in ending a partnership, decisions regarding which two areas should be spelled out in a partnership agreement?

When a partner can retire, How to distribute assets

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

a major advantage

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

an S corporation

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

cooperative

When producers, consumers, or workers with similar needs pool their resources for mutual gain, they start a(n) Blank______.

cooperative

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

corporation

Selling shares of stock to anyone allows a Blank______ to raise more money to grow.

corporation

Partners can not only bring money into the business, but also , which allows the business to borrow additional resources.

credit

One of the most important advantages of the sole proprietor form of ownership is that a business owner Blank______.

finds it easier to start and end the business

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

general partnership

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

horizontal

When a soft drink company and a mineral water company merge and then are able to supply a variety of drinking products they have formed a(n) merger.

horizontal

A merger of two firms in the same industry that allows the companies to diversify or expand their products is a(n) Blank______.

horizontal merger

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

limit individual responsibility for losses

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

limited

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.

limited

When there is one or more general partners and one or more limited partners, the firm is a(n) Blank______.

limited partnership

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

partnership

Unlimited liability as it relates to sole proprietorships is the risk of Blank______.

the loss of personal assets

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

unlimited

If your company's debts or damages are solely your responsibility you could be experiencing the disadvantage associated with owning a sole proprietorship called Blank______.

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 Blank______.

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 Blank______.

unlimited liability