MOR 331 Funeral Home Management SG 1.1

Define a sole proprietorship

A business owned by one person who bears unlimited liability for the enterprise; aka Sole proprietorship.

Define a service industry

A business that provides a service as opposed to a product.

Describe the qualities of a small business (as defined by the SBA)

A business which is independently owned and operated and is not dominant in its field of operations.

Describe (not define) a corporate charter

AKA "Articles of Incorporation" Must be developed. These documents outline the firm's name, address, agents, the amount and type of stock to be issued, and and are often required to state the purpose of the business.

Describe a general partner in a partnership

An owner in a partnership who has unlimited liability; a partner that is actively and openly engaged in the day-to-day operations of the business; also known as a managing partner.

The term for a set of formal documents filed with a government body to legally document the creation of a corporation

Articles of Incorporation

What is the name of written document that states explicitly the rights and duties of partners in a partnership?

Articles of Partnership

What is the term for an organization that combines inputs of raw materials, capital, labor, and management skills to produce useful outputs of goods and services so as to earn a profit?

Business

The family pattern in which the family members work together is known as:

Collaborative

List the advantages of a corporation

Continuity in existence - even if one person sells their stock the company continues to operate Ease of Ownership - anyone who has the money can be a shareholder in a Publicly traded companies limited liability large financial capability specialized Management - large companies can hire people to handle specific areas of management Separate legal entity

Which type of business organization is defined as having a distinct existence separate and apart from its individual members?

Corporation

List the advantages of a sole proprietorship

Ease of Starting Low cost of organization fredom to manage more profits to the single owner promptness of action secrecy of the business customer recognition unique credit standing

What are some disadvantages of working in a family funeral home?

Family Feuds Lower Salaries - Difficult to ask for a raise Successive generations may not be as interested in the business as the parent was.

What is the greatest risk for siblings in a family business?

If the siblings can not agree on the direction or the roles each should play

What are the disadvantages of a partnership?

Lack of Continuity - if both partners leave the business, the business ceases. Decisions binding on both parties. Frozen investments - Personal assets may be frozen to pay for partnership liabilities. Collateral used for the business debt may be taken if one partner makes a bad decision. Unlimited liability of general partners Possibility of unsatisfactory division of profits Possibility of Managerial difficulties

In which type of business pattern do family members avoid interfering with each others' departments or responsibilities?

Laissez-faire

List the disadvantages of a corporation

Legal restrictions on activities Separation of ownership and Control Lack of personal interest Double taxation of earnings lack of privacy difficult to create

A partner in a partnership who is not active in its management and has limited personal liability is called a:

Limited Partner

The term for a business that makes finished goods from raw materials by hand or machinery

Manufacturing Business

The family pattern in which the mother is in charge

Matriarchal

Which type of business governance board exists only on paper and never holds true meetings?

Paper Board

List the four governance patterns of a family funeral home

Paper Board Rubber-Stamp Board Advisory Board Overseer Board

The business pattern in which all family members participate in the operations, decisions or profits of the funeral home

Participative

The voluntary association of two or more people who have combined their resources to carry on as co-owners of a lawful enterprise for their joint profit is known as a:

Partnership

What is often the primary focus of the founder of a family business?

Passing the business on to the next generation

In which family business pattern is the parent in control?

Paternalistic

What are the four business patterns of a family business?

Paternalistic Laissez-Faire Participative Professional

The family pattern in which the father is in charge

Patriarchal

What are the four familial patterns of a family business?

Patriarchal Matriarchal Collaborative Conflicted

Which type of business governance board holds meetings but only approves actions desired by the manager of the funeral home?

Rubber Stamp Board

Describe the concept of double taxation in a corporation

The occurrence of corporate earnings being taxed twice; once as the earnings of the corporation and once as dividends disbursed to stockholders.

List the disadvantages of a sole proprietorship

Unlimited financial risk limited size - does not grow larger, limited life of the business duration limited management ability limited opportunities for employees difficulty in raising capital

What is a potential problem of couples working together in a family funeral home?

When the two have a difference of opinion in how the business should be managed or in other decisions that need to both agree on in order to proceed smoothly.

Describe the issues when a parent seeks to pass the family business to their offspring

Will the child want the business? Will the child be able to manage the business? What can I do to prepare the child for the business?

As a shareholder, which document would specify the number of shares you own in the company?

Stock

According to the notes, what are the advantages of a family funeral home over other business structures?

Strength of family relationships Personal commitment to the business and to service Preservation of humanity in the workplace - a family business can easily demonstrate higher levels of concern for individuals than what is usually found in the typical corporation Focus on the long run instead of the short term gains Emphasis is placed on quality.

What are the advantages of a partnership?

The Business benefits from the combined management, talent, and capital of the two partners. Easy to form as long as the partners agree to the division of labor, profits, decision-making, etc. Effeciency of labor - each partner can focus on the work they are most skilled at or that they enjoy the most. Possibility of employees bying into business. Possibility of rasing more capital than proprietorship Each partner contributes good will in the business

Describe the advisory board as a governance pattern in a family funeral home

The business governance board which helps make major decisions for the funeral home but does not deal with the daily operations.

Describe the overseer board of a family funeral home

The business governance board which makes most decisions for a family funeral home, including the decisions made during the daily operation.