BUSNESS Midterm CH 6
__________ are organizations, such as mutual funds, insurance companies, or pension funds, that pool contributions from a large number of investors, clients, or depositors to buy stock and other securities.
Institutional investors
Walmart, ExxonMobil, Intel, and virtually all other large companies in the U.S. are organized as
C corporations.
A key advantage of a corporation is that
the owners maintain limited liability.
A(n) __________ occurs when one firm buys another firm.
acquisition
In most states, the document that owners must file in order to form a corporation is referred to as the
articles of incorporation.
Historically, the three basic forms of business ownership in the United States have been the:
sole proprietorship, partnership, and corporation.
The majority of businesses today are formed as
sole proprietorships.
The __________ is the business entity in a franchise relationship that allows others to operate a business using resources it supplies in exchange for money and other considerations.
franchisor
A nonprofit corporation enjoys the benefit of
earnings that are exempt from state and federal taxes.
A corporation must register as a __________ in every state in which it operates other than its state of incorporation.
foreign corporation
All of the following are duties of a company's board of directors EXCEPT
take an active role in the daily operations.
What are the three types of partnerships?
general, limited, and limited liability
All of the following are drawbacks of general partnerships EXCEPT
inability to pool financial resources.
A __________ maintains limited liability but offers more flexibility in terms of tax treatment than other forms of business ownership.
limited liability company
The __________ is a relatively new and increasingly popular form of business ownership that is like a corporation in some ways and like a partnership in others.
limited liability company
A(n) __________ occurs when two companies agree to combine operations to form a new company.
merger
Stockholders are __________ of a corporation. They have the right to vote on issues affecting the operation of the business.
owners
A __________ is a voluntary agreement between two or more people to jointly own a business.
partnership
Based on data gathered from the U.S. Census Bureau, __________ are less common than __________ but they tend to be larger and more profitable than __________.
partnerships; sole proprietorships; corporations
From the standpoint of an owner, a major advantage of the sole proprietorship is the:
retention of control.
