Chapter 6- Types of Business Ownership

The Franchisee Payments portion of a franchise agreement typically covers which of the following?

Renewal and transfer fees

Assuming you were the CEO of a company with 72 shareholders, offering only common stock. This company would likely fall under which of the four categories of corporations?

S corporation

To be eligible for S corporation status, a corporation must have no more than

100 shareholders.

In the U.S economy, employment generated by franchised businesses grew by what percentage between 2001 and 2005?

12.6%

Which of the following statements about business divisions is NOT true?

A corporation is not responsible for all its divisions

Which of the following is NOT true of a sole proprietorship?

A sole proprietor may only use his or her legal name for the business.

Why do companies often describe acquisitions as a "merger of equals"?

Acquisitions and takeovers often carry negative connotations

Under what circumstance can corporations legally evade double taxation?

All of these answers

When considering a merger and acquisition, businesses must consider which of the following factors?

All of these answers

Which of the following is an example of a syndicate?

All of these answers

Which of the following is NOT true about cooperatives?

Co-ops only exist in agriculture

The amount of franchise or capital values tax limited liability companies must pay is based on

Company revenues.

Which of the following is NOT true regarding the legal aspects of nonprofit organizations?

Non-for-profit organizations are not required to have board members or steering committee members

Which of the following makes it difficult for franchisers to control the activities of franchisees?

Franchisees and franchisers are often separated by geography

A private or public corporate entity in which an existing government owns a stake through a holding company is referred to as a

Government-linked company.

Who usually controls the day-today activities of a corporation?

Individuals appointed by members

A corporation can be forced to shut down by the government if:

It breaks the law

Businesses that experience organic growth do so due to which of the following reasons?

New sales

In a sole proprietorship, there is no legal distinction between:

The owner and the business.

Navigating government regulations is one of the primary advantages of owning a sole proprietorship since

sole proprietorships do not have to pay corporate taxes.