BA 101 Exam 3 book questions

co-op

A business owned and controlled through pooled resources by the people who use it is a(n) ______. limited liability company limited partnership cooperative S corporation

entity

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

articles of incorporation and bylaws

A corporation is formally formed with: -articles of incorporation and bylaws -a partnership agreement -bylaws and union formation -very little paperwork or cost

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

A franchise owner will experience the coattail effect when: -they are required to pay a large share of their profits as a royalty -a fellow franchisee buys out another franchise -a fellow franchisee does something that has an impact on growth and profitability -management assistance becomes a burden to the franchise owners

agreement

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

general partnership

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

Corporation

A state-chartered legal entity with authority to act and have liability separate from its owners is a: sole proprietorship corporation general partnership stakeholder

S

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

an S corporation

A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships is: -a sole proprietorship -an S corporation -an unlimited liability company -a partnership

acquisition

A(n) ______ is where one company purchases the property and obligations of another.

minority

About 30 percent of franchises are owned by African Americans, Latinos, Asians, and Native Americans. Franchisors are becoming more focused on recruiting ______ franchisees.

Partnership

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

survival

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.

franchise agreement

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.

markets

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

franchisees

Franchisors often use technology to meet the needs of both their customers and their ______ because technology makes communication faster and more widespread.

technology

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.

low overhead expenses relief from the stress of commuting

Home-based franchises have many advantages, such as: (select all) -feeling more isolated -ease of obtaining financing -low overhead expenses -relief from the stress of commuting

sole proprietorship

If you start and manage a landscaping business on your own, you have likely started a -partnership -franchise -corporation -sole proprietorship

advantage, disadvantage

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

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: responsibility limited liability unlimited liability taxation

keep minutes or hold annual meetings

LLC's are considered to have operational flexibility because while they must submit articles of organization, they are not required to: -distribute profits or keep meeting minutes -pay taxes or hold annual meetings -keep minutes or hold annual meetings -provide employee benefits or pay taxes

there are large new markets available

Many franchises are expanding internationally because: -there is much more competition -Cultural barriers are not significant -it is expensive to adapt products -there are large new markets available

franchise

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

boss

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

general

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.

acquisition

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

finds it easier to start and end the business

One of the most important advantages of the sole proprietor form of ownership is that a business owner: -does not need a tax accountant -finds it easier to start and end the business -has many financing options -does not need an attorney

- owners/ stockholders elect board of directors - board of directors hire officers of the corporation - officers hire managers of the corporation - managers hire employees

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 - board of directors hire officers of the corporation - officers hire managers of the corporation - owners/ stockholderes elect board of directors - managers hire employees

home-based

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

separate

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

sole proprietorships

Studies have indicated that partnerships are four times more likely to succeed than: LLC's S-Corporations MLP's sole proprietorships

partnership

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

coattail effect

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

it is a legal entity corporate liability is separate from owners it is state chartered

The attributes of a conventional corporation include that: (select all that apply) -it is a legal entity -that it has unlimited liability -corporate liability is separate from owners -it is state chartered

sole proprietorship

The easiest type of business entity to form is a partnership sole proprietorship corporation

merger

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

merger

The result of two firms joining to form one is called a(n): acquisition LLC partnership merger

Franchise

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

flase, they have created a co-op

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

personal

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

Cost of forming a corporation Double taxation

What are some of the disadvantages of a corporation? (can do more than one) Cost of forming a corporation Double taxation Limited financing Limited life

Extensive paperwork Double Taxation Initial Cost

Which are considered disadvantages of incorporating? (select all that apply) Extensive paperwork Double Taxation Initial Cost Limited Liability

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

Which of following are true about the advantages and disadvantages of being a franchise owner: (select all) -While the upfront costs of a franchise may be steep, a franchise has a better chance of succeeding than starting a business from scratch -Having a nationally recognized name for your business in a franchise can help with marketing and awareness -Once you are a franchise owner, you have complete control over the competition within your marketing area -Financing for franchises are easier because they charge either a start up fee or a royalty fee

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

Which of the following are true regarding the process of forming a corporation? -The filing process for the articles of incorporation are very consistent from state to state -The process is very inexpensive in all states -The articles of incorporation are usually filed in the state in which the company will be incorporated -The bylaws of the corporation describe how the firm is to be operated