Entrepreneurship / Business Ownership / Business Responsibility
What rights do businesses have
Businesses have the right to operate, Make a profit, To use resources
_____ is the practice of charitable giving by corporations; includes contributing cash, donating equipment and products, and supporting the volunteers' efforts of company employees.
Corporate philanthropy (charity)
A number of people own the business through the purchase of stock but have limited responsibility and liability.
Corporation
Disadvantages of this form of business include a lack of responsibility for business success as a result of many owners, higher taxes, and greater government regulation of operations.
Corporation
Has access to more money through the sale of stock.
Corporation
The most stable form of business organization because ownership is easily transferred from one person to another.
Corporation
Who are the stakeholders of a business?
Customers, suppliers/vendors, local community, investors
A business owned by two or more people who share the risks, rewards, and responsibility for operations.
Partnership
All parties are responsible for all debts of the business.
Partnership
What type of corporation may be owned by just a few people and does not offer its shares for sale to the general public?
Private
What is the major difference between S corporations and limited liability companies (LLCs)?
S corporations are taxed like a partnership;
The owner of the business provides the resources and expertise needed to operate the business.
Sole Proprietorship
The primary disadvantage of this form of business organization is that the owner may not have the funds and expertise necessary to operate the business.
Sole Proprietorship
The simplest and most common form of business ownership
Sole Proprietorship
"To form my business, I used all of my savings and borrowed from the bank, and I'm personally liable for all of the debts." This is an example of which of the following forms of business ownership:
Sole proprietorship
List the three major categories of business ownership.
Sole proprietorship, partnership, corporation
A business also relies on other businesses for its success. (T or F)
T
A business should treat customers fairly and provide complete and understandable information abut the products and services they purchase (T or F)
T
A corporation may have many owners because a person can invest in the business by purchasing only a few shares of stock. (T or F)
T
An entrepreneur is a person who takes the risk of starting and operating a business with the goal of making a profit. (T or F)
T
Businesses have the responsibility to cooperate and work effectively with the businesses that support their operations. (T or F)
T
Competition gives customers choices and encourages businesses to produce better and less expensive products. (T or F)
T
Disadvantages of corporations include a lack of responsibility for business success as a result of many owners, higher taxes paid by corporations, and greater government regulation of operations. (T or F)
T
Environmental responsibility refers to the duty of a business to protect the natural resources affected by its products and operations. (T or F)
T
If a business is dishonest in its relationships with other businesses, it will soon find that those businesses will choose not to cooperate. (T or F)
T
Social responsibility refers to the duty of a business to contribute to the wellbeing of society (T or F)
T
Some people refer to a corporation as an "artificial person." (T or F)
T
The only social responsibility that a company has to its investors is an economic responsibility--it must make a profit. (T-F)
T
The organization form of the business determines who owns the business, the type of ownership risk, and the role of the owner in business operations. (T or F)
T
The primary advantage of a proprietorship is that it is very easy to form and operate. (T or F)
T
The primary responsibilities a business has to its employees are to provide a safe work environment and a reasonable wage or salary for the employees' work. (T or F)
T
The simplest and most common form of business ownership is the proprietorship. (T or F)
T
Which of the following statements about social responsibility is true?
The obligation that a business has to act socially responsible extends beyond the investors in the company to include workers, suppliers, consumers, and communities.
How are stakeholders and the board of directors similar and different- explain at least two examples
They are different in that the board of directors is thinking long term (strategic planning) for the company while stakeholders tend to think more short term (on the immediate project at hand) They are the same in that both are made up of a mix of internal and external individuals looking out for the outcome of the business
Stakeholders can be internal and external
True
If all of the individuals who own a business share unlimited liability for the business's losses, these individuals are part of a(n)
general partnership.
What is double taxation?
when the company and the investor/stockholder are both taxed for the income gained
Who are stakeholders?
Anyone who takes interest in a business
What type of corporation sells millions of shares and must furnish complete information to the public about its earnings, assets, and debts?
"C"
A type of state-chartered corporation that was developed to help small businesses by taxing them as individuals in a partnership is a(n) __________ corporation.
"S"
Andy Yocom saw prime advertising space on the flags on the golf course. He reasoned that any marketing messages would get prominent attention if they were placed on the flags since golfers focus on them when they take their shots. As a result, Yocom used his own initiative and money to start Invision Golf Group Inc. Yocom is an example of a(n):
A. entrepreneur
Consumers produce and sell the products and services produced by business (T or F)
F
In a general partnership, the business is owned by two or more people with one person assuming the risks, rewards, and responsibility for operations. (T or F)
F
There are many legal requirements to start a business as a proprietorship. (T or F)
F
One major-common way in which many businesses demonstrate their responsibility toward employees is by providing them with
a safe working environment.
The difference between the manager and the entrepreneur is that the entrepreneur:
assumes the risk of the business
Who approves the annual budget for a business
board of directors
In the United States, which form of business organization generates the most sales and profits?
corporations
Jon P. Farmer is the founder of Kolopua Hawaii LLC, a company that markets Pure Hawaiian Air. Bottles of Pure Hawaiian Air contain air that smells like the floral bouquet that greets tourists as they get off the plane in Hawaii. Retailing for about $5 apiece, the bottles are sold at gift shops in Hawaii, as well as to travel agents nationwide who give them to clients. As a(n) _____, Farmer's annual income exceeds $100,000 annually.
entrepreneur
The person who takes the risk of starting and managing a business to make a profit is called a(n):
entrepreneur
The American Red Cross is an example of a(n) ___________ corporation.
nonprofit
An entrepreneur is a person who _____ a business.
owns and operates
John, Robert, and Charles were college friends who wanted to start a business. John has creative ability, Robert's expertise is selling, and Charles' expertise is management. However, each has limited capital. The ideal business ownership for these young men is a
partnership.
Businesses can show their social responsibility by contributing to
private causes - charity.
Owners of a business have a responsibility to employees to:
provide a safe work environment, a reasonable wage or salary, Have a work environment that is free from harassment or discrimination because of age, gender, or ethnicity
A large retailer feels that it has a duty to contribute to the well-being of society, so it donates a portion of its proceeds to a charity that helps the environment. The retailer is demonstrating
responsibility to society
What forms of business ownership have to deal with the disadvantage of unlimited liability?
sole proprietorship and general partnership
For Lladro Comercial, S.A., the manufacturer of handcrafted porcelains, its employees, suppliers of the paints used to decorate its porcelains, retailers of its products, and people who benefit from its philanthropy are all:
stakeholders
Who are the owners of a corporation?
stockholders
The President/CEO answers primarily to
the board of directors
