Bus Mgmt Ch 10 Managing the Forms of Business Ownership
Approximately how many new businesses fail within the first four to five years?
50 percent
Which one of the following statements is true about entrepreneurs?
Entrepreneurs usually work hard and for long hours.
A nonprofit corporation pays small dividends to shareholders. T or F?
False
A partnership continues even after one partner dies. T or F?
False
A stockholder has the same financial responsibility as a partner. T or F?
False
Corporations usually have a tax advantage over partnerships. T or F?
False
Each stockholder has only one vote regardless of the number of shares owned. T or F?
False
New businesses almost always fail for purely financial reasons. T or F?
False
Stockholders decide when dividends are to be distributed. T or F?
False
The most common form of business ownership is the partnership. T or F?
False
The stockholders make up the ruling body of a corporation. T or F?
False
A business plan helps entrepreneurs see the risks and responsibilities involved in starting a business. T or F?
True
A business with a balance sheet showing assets valued at $100,000 and capital valued at $100,000 is in a weak financial position. T or F?
True
A cooperative provides members with both cost and profit advantages they would not have individually. T or F?
True
A corporation can make contracts, borrow money, and be sued. T or F?
True
A disadvantage of a partnership that fails is that a partner can lose personal assets in addition to the amount of money invested in the business. T or F?
True
A partnership could be owned by as many as ten or more partners. T or F?
True
Financing the business one of the responsibilities of the business owner. T or F?
True
If a partner enters into a contract against the wishes of the other partners, the other partners are legally responsible for the contract. T or F?
True
If one partner is unable to pay his or her portion of the business' debts, the other partners must pay it. T or F?
True
It is difficult to withdraw from a partnership. T or F?
True
To form a corporation a charter is needed. T or F?
True
balance sheet
a statement of financial position
business plan
a written document that describes how to achieve the goals of a business
In a limited partnership
at least one partner must be a general partner with unlimited liability
The type of business that can be operated suitably as a proprietorship is one that
can be manager by the proprietor or by persons hired by the proprietor
An official document giving power to run a corporation is a
charter
close corporation
corporation that does not offer its shares of stock for public sale
In a sole proprietorship
creditors have first claim against assets
An agreement among two or more businesses to work together to provide a good or service is called a
joint venture
In which type of partnership is the liability of a partner limited to the amount of the partner's investment?
limited partnership
liabilities
money owed by a business
An advantage of partnerships when compared to proprietorships is
more capital is usually available
If the corporation fails, stockholders are responsible for
only the amount invested in the corporation
stockholders
owners of a corporation
creditors
parties who have first claim against assets
A written agreement between two or more people identifying how they will add capital, labor, or other assets and divide any profits or share any losses in their business is called a
partnership agreement
assets
property owned by a business
The most common form of business organization is the
proprietorship
A stockholder who cannot attend a shareholders' meeting can submit votes by
proxy
An advantage of corporations in relation to partnerships is that
shareholders can transfer ownership easily
Ownership of a corporation is measured in
shares
A corporation is authorized to act as if it were a single person by the
state in which it is incorporated
Quasi-public corporations are often supported by
subsidies
One of the main reasons many proprietorship fail within a short time is that
the owner lacks needed skills
officer
top executive who is hired to manage a business
If assets are valued at $500,000 and capital amounts to $350,00, the liabilities of the business are
$150,000
intrapreneur
an employee who is given funds and freedom to create a special unit or department within a company in order to develop a new product, process, or service
capital
difference between assets and liabilities
A nonprofit corporation is an organization that
does not pay taxes and does not exist to make a profit