Ch 4 SB

Many minority business owners prefer a(n) ___ because it offers business connections and support

Franchise

Which of the following are true regarding the process of forming a corporation:

- The articles of incorporation must be filed in the state in which the company will be incorporated - The bylaws of the corporation describe how the firm is to be operated

The attributes of a conventional corporation include that:

-It is state chartered -Corporate liability is separate from owners -It is a legal entity

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

Acquisition

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

Acquisition OR buyout

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

Acquisition or buyout

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

Boss, employer, OR manager

Which are considered disadvantages of incorporating?

Double Taxation; Initial Cost; Extensive paperwork

What are some of the disadvantages of a corporation?

Double taxation; Cost of forming a corporation

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

Franchise

the right to use a specific business's name and sell its products or services in a given territory is a(n) ___ agreement

Franchise

Franchisers often use technology to meet the needs of both their customers and their ___ because technology makes communication faster and more widespread

Franchisees, employees, suppliers, investors, stakeholders OR franchisee

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

Home; based

LLC's 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

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

LLC

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

Liability

What are some advantages of franchising?

Lower failure rate; Recognized name; Financial advice

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.

Overhead OR operating

A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships is called a(n)___ corporation.

S corporation

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.

Survival OR survivor

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

Unlimited; liability

A franchise owner will experience the coattail effect when:

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

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

agreement

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

are not involved in daily operations

A corporation is formally formed with:

articles of incorporation and bylaws

The actions of a fellow franchisee will affect your franchise. This is known as the ____ ____.

coattail

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

coattail effect

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

cooperative

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

cooperative

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

corporation

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

finds it easier to start and end the business

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.

franchise agreement

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

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

like a partnership or sole proprietorship

Don wanted to incorporate his business and liked the attributes of an S-corporation, however, he did not feel the eligibility requirements would work for his purposes. He is likely to choose to form a(n) ____ ____ company.

limited liability

Franchises are expanding internationally to access additional ___ that have new customers and to increase their profit potential

markets

The result of two firms (usually corporations combining to form one company is called a ____.

merger

An advantage of starting an online franchise is that:

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

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

partnership

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

partnership

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

partnership

When two or more people legally agree to become co-owners of a business, the organization is called a(n) ____.

partnership

Studies have indicated that partnerships are four times more likely to succeed than:

sole proprietorships

Many franchises are expanding internationally because:

there are large new markets available

One of the most notable advantages of an online franchise is

there is no brick-and-mortar real estate cost

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:

unlimited liability

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

vertical

When two firms operating in different stages of related businesses join, it is called a(n) ___ merger.

vertical

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

websites technology e-commerce

Franchises are attractive to minority populations because:

-They provide personal ownership of a business -Some offer financial support to aspiring business owners

When two firms join together to form one new company, it is called a ____.

merger