Chapter 5 marketing

Select all that apply What are some of the advantages of a corporation?

Ability to raise more money for investment Limited liability

owned businesses are growing at more than the national rate.

Blank 1: Minority

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

Blank 1: S

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

Blank 1: acquisition or buyout

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

Blank 1: advantage, positive, or benefit Blank 2: disadvantage, negative, or drawback

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

Blank 1: agreement

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

Blank 1: boss, employer, or manager

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

Blank 1: coattail Blank 2: effect

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

Blank 1: double or dual

A corporation is a legal _____ with authority to act and have liability separate from its owners.

Blank 1: entity

The right to use a specific business' name and sell its products or services in a given territory is a(n

Blank 1: franchise

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

Blank 1: 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.

Blank 1: horizontal

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

Blank 1: liability

A key advantage of LLCs is ___ liability where personal assets are protected.

Blank 1: 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.

Blank 1: limited

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)

Blank 1: limited Blank 2: liability

Limited liability, choice of taxation, flexible ownership rules, and operating flexibility are all advantages of a(n)_____ company.

Blank 1: limited Blank 2: liability

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

Blank 1: markets

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

Blank 1: merger

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

Blank 1: merger

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.

Blank 1: overhead or operating

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

Blank 1: separate, independent, or separated

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 the sale of

Blank 1: stock, bonds, shares, or equity

A corporation can sell ____ to anyone who is interested to raise more money for investment.

Blank 1: stock, shares, bonds, or equity

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.

Blank 1: technology

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

Blank 1: unlimited Blank 2: liability

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

Blank 1: unlimited or full

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

Blank 1: vertical

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

Blank 1: vertical

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

False

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

False

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

LLC

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

Limited liability

Click and drag on elements in order 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)

Owners/stockholders elect board of directorsBoard of Directors hire officers of the corporationOfficers hire managers of the corporationManagers hire employees

Select all that apply 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

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

True

A franchise owner will experience the coattail effect when:

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

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

a major advantage

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

acquisition

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

an S corporation

Multiple Choice Question A corporation is formally formed with:

articles of incorporation and bylaws

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

cooperative

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

corporation

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

e-commerce technology websites

Select all that apply LLCs do have to submit articles of organization and an operating agreement, but do not have to

file written resolutions keep minutes hold annual meetings

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

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):

franchise

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

general partnership

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

limit individual responsibility for losses

The form of business ownership called _______ protects the person's personal assets from the debts of the business.

limited liability

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

limited partnership

Select all that apply Advantages of starting an online franchise are:

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

Select all that apply Home-based franchises have many advantages, such as:

relief from the stress of commuting low overhead expenses

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

sole proprietorship

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

sole proprietorships

Select all that apply Franchises are attractive to minority populations because:

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

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.

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:

unlimited liability

Select all that apply Ending a partnership can be difficult because of problems deciding:

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

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

Blank 1: personal

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

Blank 1: partnership

Select all that apply What are the advantages of the LLC form of organization?

Choice of taxation Limited liability Flexible ownership rules

Select all that apply What are some of the disadvantages of a corporation?

Cost of forming a corporation Double taxation

Multiple Choice Question The easiest type of business entity to form is a

sole proprietorship