Intro To Business

Name six items that should be agreed upon and recorded in the articles of partnership.

- the name of the new business - how much each partner will invest - how much of a salary over a time each partner will draw - how much of the profits and losses after salaries are paid will be shared in proportion to each partner's investment - what the responsibilities will be of each partner - in the case of a death or necessary withdrawal of one partner, the other has the right to buy the other partner's share in the business

How does a cooperative differ from a regular corporation?

A cooperative is a business that is owned by the members it serves and is managed in their interests, whereas a regular corporation's management is divided down between more people and each person has a say.

Who actually manages a corporation?

A group of people called the Board of Directors manages the company. The Board of Directors is made up of a president, vice president, and a treasurer that manages to daily operations of the corporation

What is the difference between a municipal corporation and a business corporation?

A municipal corporation is a non-profit organization whose services are provided for its citizens from levied taxes. In contrast, a business corporation makes a profit and has stock representing ownership is not issued.

What advantages over her original organization resulted when Julie Alcess entered into a partnership with Andy Davidson?

Andy Davidson, who was studying to be an attorney, would help Julie keep the records and keep all the papers from the government filed.

What advantages did Julie Alcess find in starting her own business?

Because Julie had a good work record and had experience in the sporting goods business, the local bank gave her a start-up loan. Also, Julie had a good friend that was good in accounting and business law. This friend agreed to help Julie keep records and file forms the government needed. Julie also got a good feeling from owning a successful small business.

What evidence of ownership did Julie and Andy receive when they changed from a partnership to a corporation?

Julie and Andy received a large amount of shares in the company and have the ability to be the controlling shareholders.

Name the five activities that Julie performed as a manager

Julie performed activities that focused on the areas of planning, organizing, staffing, leading and controlling.

What disadvantages did Julie find as the operator of a sole proprietorship?

Julie saw that owning a small business came with long hours and much decision-making.

Name one advantage and one disadvantage of operating a business as a franchise.

One advantage of operating business as a franchise is you will automatically have a solid financial foundation established business. However, one disadvantage is that you have a little control over your company because it is a part of a franchise.

Why does a corporation's board of directors keep part of the profit before dividing the remainder among the stockholders?

The Board of Directors keep some of the money in order for expansion and to better the future for the company.

Name two disadvantages of a corporation.

The management of a corporation is divided down between more people, so the original owners have less of a say because there are more people. Also, they earn a smaller portion of the profits.

What are the three conditions of a franchise agreement?

The three conditions of a franchise agreement include a franchise, which is a written contract granting permission to sell someone else's product or service in a prescribed manner, over a certain period of time, and a specified territory, a franchisee, which is a person or a group of people who received the franchise from the parent company to sell it's products or services, and a franchisor, which is the parent company that grants permission to a person or group to sell it's products or services.

State two advantages that a corporation has over a partnership.

Two advantages that a corporation has over a partnership are the people of the corporation would not be personally responsible for the debts of the business and in case of a business failure, each member of the corporation could lose only the amount he or she invested.