Module 3 reading assignment
each description to the corresponding type of bankruptcy ---- chapter 7
Forces debtors to turn over assets to a trustee for division among creditors
What is the definition of a tax?
A charge used to pay for public services
What is a tort?
A civil wrongful act that results in injury to people or property
What is value-added tax (VAT)?
Consumption taxes levied at each stage of production
supreme
Hears cases from appellate or state supreme courts
You have worked at a retail outlet for a long time and have become friendly with the brand's bankers. You tell them about your business idea. They support it and agree to lend you the money you need. What is your funding source in this scenario?
a financial institution
When a person unaffiliated with a company offers to buy stock from shareholders for higher than market price, what is likely happening?
a hostile takeover launched by a tender offer
What is an intentional tort?
a wilful act resulting in injury
Rules and regulations made by administrative agencies at all levels of government are called ---- laws.
administrative
Trading goods or services without the exchange of money is known as
bartering
The failure or refusal of a party to a contract to live up to the promises made is called a ---- of contract.
breech
What are ways that hostile takeovers can be launched?
by a proxy fight, by a tender offer
A business client who is a child or who is an adult who suffers from a disease such as Alzheimer's would not be able to enter a contract with you because of which of the following conditions under contract law?
capacity
Laws made by judges ruling on cases based on precedents are called ---- laws.
common
In hostile takeovers launched by either proxy fights or tender offers, corporate raiders must appeal to which group of people?
company shareholders
A(n) ---- merger occurs when two companies that are in different industries and perform different activities merge.
conglomerate
What type of tax is based on the value of services or property other than real estate?
excise
Rashid is a business owner who allows others to sell his products. What term best describes Rashid?
franchisor
Small businesses are defined as entities that are Blank______.
independently owned and operated
A willful act resulting in injury is known as a(n) ---- tort.
intentional
Laws that govern activities between nations are called ---- laws.
international
A ---- occurs when two companies join to form a new company.
merger
An unintentional act that results in injury is known as ----
negligence
Which are types of torts covered by tort law?
negligence, intentional
What type of tax is paid on real estate?
property
What type of tax is collected by retail merchants when they sell goods?
sales
You are a clothing store owner, and your customers must pay a tax on every piece of clothing they buy. What kind of tax are the customers paying?
sales
To be legally enforceable, a contract must meet each of ______ conditions.
six
Businesses with fewer than 100 to 500 employees are known as ---- businesses.
small
Written laws created by legislative bodies are called ---- laws.
statutory
You run your business in Illinois. The state passes a law that all companies must charge an 8% sales tax on every product they sell. Which type of law is this?
statutory
A charge used to pay for public services and to discourage or encourage certain behavior is known as a(n ----
tax
What is the term for a corporate raider offering to buy shareholders' stock at a price that exceeds the present market price?
tender offer
What are reasons that acquisitions and mergers occur?
to reduce taxes, to acquire marginal talent, to save money by consolidating operations
Wrongful injuries in business relationships not covered by contract or criminal law are covered by ---- law.
tort
Civil wrongful acts that result in injury to people or property are known as ----
torts
Civil wrongful acts that result in injury to people or property are known as----
torts
What type of tax is levied at each stage of production?
value- added
A(n) ---- merger occurs when two companies that are in the same industry but perform different activities merge.
vertical
What is an advantage of sole proprietorship?
you can start the business easily
appellate
Reviews cases appealed from lower courts considering questions of law but not questions of fact
Micropreneur
An individual who launches a home-based business
legality
Did the contract involve a legal transaction?
Statutory
Written laws created by legislative bodies
What is the definition of administrative law?
Rules and regulations made by administrative agencies at all levels of government
When is a business plan unnecessary?
When you are able to get financing without it, When you want to protect key strategic information, When you need to act fast
the research question with the additional question it raises.----How will the business be marketed?
Who are your customers?
What is the definition of statutory law?
Written laws created by legislative bodies
In what type of partnership do two partners share all of the responsibilities, profits, and liabilities?
general
A(n) ---- merger occurs when two companies that are in the same industry and perform the same activity merge.
horizontal
What type of merger takes place when two companies that are in the same industry and perform the same activity merge?
horizontal
A(n) ---- takeover occurs when an outsider buys enough shares in a company to take control of it against the will of the corporation's top management and directors.
hostile
What type of tax is paid on earnings received by individuals and businesses?
income
Which type of external business expansion occurs when a business owner merges two companies in the same industry that perform different activities?
vertical merger
legal
Description of how the business will be structured
example to the corresponding cause of business failure.---- lack of financial support
Marcel owns a clothing store shop that sells designer clothes but has no savings on hand to weather an economic downturn.
You read a corporate notice that says your company is going to acquire another business that has different strengths that expand your company's strengths. The notice also says that your company's leaders are optimistic about performance improving greatly as a result of this buy. What is the reason for this acquisition?
Acquiring to have a capability without having to develop it
What are ways to alter a product to create a new business idea?
Adapt it to a new market., Make it less expensively., Combine it with another product.
each description to the corresponding type of bankruptcy ---- Chapter 11
Allows companies to reorganize and continue business operations while paying creditors a portion of their debts
each description to the corresponding type of bankruptcy ---- chapter 13
Allows individuals and small businesses with debts below a certain amount to repay their creditors over a period of time under a court-approved plan
Franchisor
Allows others to manufacture or make its products, Gives permission to distribute its products
What is the term that describes when one company buys another company?
An acquisition
What should you keep in mind when deciding whether or not to purchase an existing small business?
An existing business is likely to come with a location and customer base.
Intrapreneur
An individual who develops a new venture within an existing organization
Solopreneur
An individual who independently owns and operates a business
What is negligence?
An unintentional act that results in injury
How is Chapter 11 bankruptcy different from Chapter 13 bankruptcy?
Chapter 11 applies only to companies.
How is Chapter 7 bankruptcy different from Chapter 13 bankruptcy?
Chapter 7 forces debtors to turn over their assets, whereas Chapter 13 allows debtors to keep most of their assets.
acquisition
Company A buys Company B., Verizon Communications buys Verizon Wireless., Amazon purchases Whole Foods.
manufacturing
Description of how your product will be made
management
Description of the credentials and experience of managers and consultants
Executive summary
Description of the special qualities of your product or service
introduction
Description of your product's place in the overall industry
agreement
Did a serious, definite offer get communicated, and was it accepted?
capacity
Did the parties have the capacity, or competence, to negotiate?
Trial
Hears criminal or civil cases not specifically assigned to other courts
What is the definition of common law?
Laws made by judges ruling on cases based on precedents
common
Laws made by judges ruling on cases based on precedents
What is the definition of international law?
Laws that govern activities between nations
international
Laws that govern activities between nations
What does contract law apply to?
Legally enforceable agreements between private parties
example to the corresponding cause of business failure.----government paperwork
Marta wants to apply for a permit to sell alcohol at her cafe, but she is having a hard time understanding the liquor license permitting process.
Which sources of funding are risks that may cause entrepreneurs to lose some of their personal money?
Maxing out personal credit cards, Taking out a second mortgage
What is the best definition of an intrapreneur?
One who comes up with ideas for new products and services within an organization
What are components of the business model? More than one answer may be correct.
Projected income, Functions of the business, Projected expenses
What are low-risk ways for entrepreneurs to keep their business afloat before it becomes profitable or during hard times?
Receiving a microloan from a sympathetic organization like Prosper.com, Working a second job, online fundraising
administrative
Rules and regulations made by administrative agencies at all levels of government
Which funding sources are most likely to be based on personal finances? More than one answer may be correct.
Second mortgage, Loan from a friend
How do supreme and appellate courts differ from trial courts?
Supreme and appellate courts hear cases not specifically assigned to other courts.
What is the best definition of entrepreneurship?
Taking a chance in order to launch an independent business
example to the corresponding cause of business failure.---- inadequate managing skills
Tanya opens a restaurant despite the fact that she has never worked at a restaurant.
What are excise taxes?
Taxes based on the value of services or property other than real estate
What are sales taxes?
Taxes collected by retail merchants on the merchandise they sell
What are income taxes?
Taxes paid on earnings received by individuals and businesses
What are property taxes?
Taxes paid on real estate owned by individuals and businesses
proper form
Was the contract prepared and signed in a form required by the law?
consent
Was the offer accepted voluntarily, with no fraud or duress?
consideration
Were items of value exchanged in the contract?
the research question with the additional question it raises.---- is the basic idea of the business?
What need is met by your product or service?
the research question with the additional question it raises.---- will the business be financed?
What returns will investors receive?
Anthony opens a taco shop on the same street as another taco shop, a burrito stand, and a sit-down Mexican restaurant. He knows that his food is good, but he is worried that the interior of his small shop is unattractive. He would love to put a fresh coat of paint on the walls and generally make the place look better to entice customers to come inside. But his family and friends will not loan him money, his suppliers have refused to extend him a line of short-term credit, and his bank wants him to put his motorcycle up for collateral, which he does not want to do. Which of these are likely to cause Anthony's business to fail?
aggressive competition, lack of financial support
Each supplier of a company receives a written contract spelling out all the terms of their business relationship. Both the company and the supplier sign the contract, which indicates their acceptance of the the terms. Which condition of contract law does this describe?
agreement
Company X and Company Y are in different industries and perform different activities. If Company X and Company Y merge, what kind of merger would take place?
conglomerate
Which types of mergers involve companies that perform different activities?
conglomerate, vertical
What type of law covers legally enforceable agreements between private parties?
contract
What is the term that describes a corporate raider's purchase of enough shares in a company to take control of it despite the opposition of company executives?
hostile takeover
You must pay taxes to the government based on how much money you earn in a year. What kind of tax are you paying?
income
A(n) ---- occurs when one company buys another one.
acquisition
What are common ways that entrepreneurs personally finance their new enterprise?
Using savings, Taking out a second mortgage, Maxing out credit cards
What is a merger?
When two companies come together to form a new company
What factors may make buying an existing business the right choice for an entrepreneur?
a list of previous customers, an established location
What are disadvantages of sole proprietorship?
Unlimited financial liability, inability to sell the business
Merger
Bert and Ernie come together to form a new company., Exxon and Mobil join to become ExxonMobil.
Which amounts could be considered "microloans"?
$500 - 35,000
How many workers do the majority of small businesses employ?
100 or fewer
Entrepreneurial team
A group that works together to innovate
What is the definition of a master limited partnership (MLP)?
A partnership that acts like a corporation, selling stock on a stock exchange, but is taxed like a partnership, paying a lower rate than the corporate income tax
What are examples of external expansion in a business?
Acquiring another company,Merging with another company
Freelancer
An individual who is self-employed and utilizes their knowledge, skills, and abilities, to perform tasks, services, or functions for a customer.
Side hustle
An individual who works on a project or business idea outside of their regular employment
Franchisee
Buys the right to sell a business's products, Purchases a franchise
Which questions should you ask yourself when evaluating a new business idea? More than one answer may be correct.
Can I do it?, Is it needed?
Jacob is an entrepreneur looking for his next big business idea. What are ways he can generate new ideas?
Combine two existing products into one new product., Select a feature of an existing product to create a spin-off., Find an existing product and make it less expensive to produce.
What are advantages of the corporation form of business ownership?
Corporations have little to no liability., Corporations have considerable financial resources.
What are disadvantages of the corporation form of business ownership?
Corporations must publicly disclose financial information., Corporations are taxed twice.
Which of these would be most helpful in getting financing and thinking through important details about your business idea?
Creating a business plan
marketing
Description of competition and plans for advertising and sales
financing
Description of expected income and expenses
example to the corresponding cause of business failure.---- difficulty hiring and keeping good employees
Destinee loses workers to other companies who offer better benefits.
Which of the following are characteristics of an entrepreneur?
Entrepreneurs start new businesses., Entrepreneurs take risks.
What are disadvantages of partnerships?
Having to work closely with partners you may disagree with, unlimited financial liability
What are important questions to consider when writing a business plan?
How am I qualified?, What is the state of the industry?
How can creating a business plan make you a more effective business owner?
It makes you think through every detail.
What are some reasons NOT to write a business plan? More than one answer may be correct.
It may take too long., It may reveal too much.
In which partnerships do some partners have partial financial liability?
Limited liability partnerships, limited partnerships
Which statement about loans from family and friends is true?
Loans from family and friends should be documented in writing.
example to the corresponding cause of business failure.---- aggressive competition
Nicolette notices that another yoga studio has opened down the block from hers and that it offers longer hours and cheaper classes.
Which types of entrepreneurs are most likely to be independent?
Solopreneurs independently own and operate their own businesses., Micropreneurs take on risk to start very small businesses in order to improve the quality of their lives.
What factors are outlined in a business plan? Multiple select question.
Strategies to achieve goals, Standards of success, Business goals
Which statement is true about funding a new business?
There is a wide variety of possible sources of funding.
Which is a true statement about sole proprietorships?
They are owned and usually managed by one person.
What influence do small businesses have on corporate downsizing in the United States?
They help to offset the effects of corporate downsizing
Which of these statements are true about the importance of small businesses to the U.S. economy?
They represent the majority of sales in the United States., They provide a large number of jobs.
You have started an online retail website for jewelry. A designer agrees to create a section of your website for free if you sell his work at no commission on your website. What is your source of funding in this case?
barter arrangement
Which funding source involves an exchange of goods and services without the exchange of money?
bartering
One reason NOT to write a business plan is to keep important company strategies from Blank______.
being duplicated by competitors
What is another term for a description of a company's purpose, functions, parts, income, and expenses? Multiple choice question.
business model
What term is used to describe a document that outlines a new company's business goals, a strategy for how the goals will be achieved, and how success will be measured?
business plan
The difference between a franchisee and a franchisor is that the franchisee ______ a franchise.
buys
A business has little liability, the ability to raise money from shareholders and easily sell shares of stock. There are extensive costs and paperwork from start to end, financial information must be publicly disclosed, and it is difficult to end the business. What type of business is this?
corporation
A(n) is a company authorized to act as a single entity and is legally recognized as a single person.
corporation
Which funding sources are particularly reluctant to give loans to start-ups and may require the start-up to provide collateral?
credit unions, banks
All the well-qualified, high-performing workers Sonya has hired have quit. They tell her that they enjoy the job but that it does not pay well enough and there aren't opportunities for growth or promotion. If Sonya's business fails, what will be the likely cause?
difficulty keeping good employees
Which element of a business plan should be written last?
executive summary
What is an advantage of a partnership?
fairly simple taxes
Your parents agree to lend you $10,000 to help you with your new business, and you tell them that you will pay them back in the future. What is your source of funding in this scenario?
family and friends
When evaluating a business idea, you should ensure that your proposed business ______ in the marketplace.
fills a need
In a(n) ---- partnership, two or more partners run the business and both have full financial and managerial liability.
general
In which partnership are all of the partners completely financially liable?
general partnership
What name is given to an entrepreneur who sees the opportunity for a new product or service within an existing company?
intrapreneur
Which two types of entrepreneurs are most likely to work within a previously existing business?
intrapreneur, entrepreneurial team
In a limited ---- partnership, partners are only liable for the outcomes of their actions and their employees' actions but not the outcomes of other partner's actions.
liability
In a(n) ---- partnership, there are partners who have an investment in the firm but do not have managerial responsibility or financial liability
limited
In a(n) ---- partnership, there are partners who have an investment in the firm but do not have managerial responsibility or financial liability.
limited
In what type of partnership are there partners who have invested in the partnership but have no financial liability or managerial responsibility?
limited
Ted is a partner at a business. Although he has invested in the business, he has no managerial responsibilities or financial liability. What kind of partnership is Ted a part of?
limited
In what type of partnership are partners only liable for the outcomes of their actions and their employees' actions?
limited liability
A partnership that acts like a corporation, selling stock on a stock exchange, but is taxed like a partnership, paying a lower rate than the corporate income tax, is known as a(n) ---- limited partnership.
master
A ---- is a business owned and operated by two or more persons as a voluntary legal association.
partnership
What is the term for a business started by two people using a legal agreement in which each person brings financial resources and managerial expertise to the business but the business cannot act as a single entity?
partnership
Which funding sources are most likely to be based on personal finances?
second mortgage, loan from a friend
What is the name given to enterprises that are independently owned and run, are not dominant in their field, and meet government criteria for number of employees and amount of profit?
small businesses
A(n) ---- proprietorship is a business owned and typically managed by one person.
sole
Which funding source is most likely to offer short-term credit and extended-payment plans?
suppliers
Which section of a business plan would explain that the company is set up as a partnership?
the legal section
Which types of mergers involve companies that are in the same industry?
vertical, horizontal