ba 151: ch4 smartbook

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

partnership

A limited liability company is taxed like a(n) _______

partnership

is an association of two or more persons who carry on as co-owners of a business.

partnership

When a corporation is separate from its owners and does not terminate with the death of one owner, the corporation is said to have ______.

perpetual life

The partnership business entity is not taxed, because each partner pays tax on the business's profits as their ______. Multiple choice question.

personal income

_____ stock is a special type of stock whose owners, though not generally having a say in running the company, have a claim to profits before other stockholders do.

preferred

What term refers to a corporation that is owned by just one or a few people, often a family, who are closely involved in managing the business?

private corporation

corporation is one whose stock anyone may buy, sell, or trade.

public

An advantage of a sole proprietorship is that the owner ______. Multiple choice question.

retains profits

A form of business ownership that looks like a corporation but is taxed as though it were a partnership with restrictions on shareholders is ______.

s corporation

What is required to start a partnership?

Articles of partnership

Which document sets forth the basic legal agreement between partners?

Articles of partnership

What is a legal document that the state issues to a company based on information the company provides in the articles of incorporation?

Corporate charter

What is the main information included on the tax return for a partnership?

Distribution of profits among the partners

What is considered an advantage of corporations?

Ease of transfer of ownership

It is easy to start a sole proprietorship because

it may only require a simple permit or license to start

A partnership established for a specific project or for a limited time is called a(n) venture.

joint

A partnership established for a specific project or for a limited time is called a ______.

joint venture

A(n) ______ is an attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing.

leveraged buyout

Perpetual _______ for a corporation mean/means that the death of one owner does not end the corporation.

life

Owners in an LLC have ______ liability.

limited

Stockholders' liability for losses only up to the amount they invest is called ______________.

limited liabilty

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

merger

Which three items are usually listed in the articles of partnership?

How profits will be distributed Authority and responsibility of each partner Contribution (money or assets) of each partner

After retiring from his corporate job at age 50, Marcus decided to realize his life-long dream and open up a donut shop in his hometown. He runs the business by himself, including the donut making. Marcus's donut shop is an example of a _____.

Sole proprietorship

In which type of business ownership do profits belong solely to the owner?

Sole proprietorship

Which form of business allows for the greatest degree of secrecy surrounding business reports?

Sole proprietorship

______ have fewer financial resources since they are limited to what the owner is able to borrow.

Sole proprietorship

f the following forms of business ownership, which is relatively easy and inexpensive to form?

Sole proprietorship

How are the members of a board of directors selected? Multiple choice question.

They are elected by the stockholders of the corporation.

Which statement is an accurate description of S corporations?

They are taxed like a partnership.

What is a disadvantage of sole proprietorship?

Unlimited liability

Dividend payments on preferred stock are usually based on Blank______.

a fixed percentage of the initial issuing price

A(n) ______ occurs when one company purchases the property and obligations of another.

acquisition

The selling of a corporation's stock on public markets for the first time is known as ______.

an initial public offering

A _____ is elected by the stockholders to oversee the general operation of the corporation and set its long-range objectives.

board of directors

In a leveraged buyout, employees, managers, or investors finance the purchase of the company by ______.

borrowing against its assets

The situation known as "double taxation" only occurs with which form of business ownership? Multiple choice question.

cooperation

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

cooperative

Before the owners of a corporation can establish the company's bylaws and elect a board of directors, they must receive a Blank______ from the state in which they are doing business.

corporate charter

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

corporation

As a legal entity, _______ have many of the rights, duties, and powers of a person, such as the right to receive, own, and transfer property.

corporation

When a corporation pays a tax on its profits and individual stockholders each pay tax on dividends distributed by the corporation, it is called ______.

double taxation

When Kylie decided to sell her shares of stock in the Target Corporation, it didn't affect the day-to-day business operations of the company and she didn't need to seek the approval of other stockholders before she sold her stock. What advantage of corporations does this represent? Multiple choice question.

ease of transfer of ownership

A key disadvantage of a general partnership is ______.

friction between partners

The two major types of partnerships are ______.

general and limited

What are the two main types of partnerships?

general and limited

If two companies that both make water valves for plumbing contractors merge, it would be an example of a ______ merger. Multiple choice question.

horizontal

In a partnership, the liability of limited partners is limited to their ______.

initial investment

One advantage of a partnership is that ______.

it is easy to create

In a sole proprietorship, the possibility that competitors can obtain trade secrets is minimized because _______. Multiple choice question.

the sole proprietor does not have to discuss publicly his or her operating plans

When each general partner is liable for the debts of the firm, no matter who was responsible for causing the debt, this is called ______ liability.

unlimited

In a sole proprietorship, any debts or damages incurred by the business that cannot be paid by the business are considered personal debts and the owner must pay them. This disadvantage can be termed _____.

unlimited liability

Funds available for a sole proprietorship are limited to ______.

what the owner can provide

Anyone who is interested in buying stock in Hudson Water Supply can do so. This means that Hudson Water Supply is a _____ corporation.

private

Quantum Manufacturing was founded in 1955 by Earl and Jenni Maxwell. Today, their two sons own the business and are closely involved in managing the day-to-day workings of the company. What kind of company is Quantum Manufacturing? Multiple choice question.

private corporation