Chapter 5 marketing book reading questions

What is the order in which members of a corporation are chosen in order to separate ownership from management?

1. Owners/stockholders elect board of directors 2. Board of directors hire officers of the corporation 3. Officers hire managers of the corporation 4. Managers hire employees

The advantages of becoming a sole proprietorship include

Being your own boss

One company's purchase of the property and obligations of another company is a

Acquisition

Many people do not like working for someone, so being your own _______ is an advantage of sole proprietorships.

Boss

What are considered disadvantages of incorporating?

Double taxation Initial cost Extensive paperwork

True or false: if you and a friend start a business together, you have started a sole proprietorship.

False

An advantage of a sole proprietorship is

Independent decision making

LLCs are considered to have operational flexibility because while they must submit articles of organization, they are not required to:

Keep minutes or hold annual meetings.

Leaving a _____ means owners can leave an ongoing business for future generations

Legacy

When there is one or more general partners and one or more limited partners, the firm is a:

Limited partnership

Items considered fringe benefits that people working for a company are likely to receive, but a sole proprietor has to develop on his own are:

No paid health insurance No paid disability insurance No pension plan No sick leave No vacation pay

Unlimited liability as it relates to sole proprietorships is the risk of loss of _______ assets beyond the assets of the business.

Personal

A unique government creation that looks like a corporation but is taxed like a sole proprietorship or partnership is called a ______ corporation

S

The responsibility of the owner of a sole proprietorship for all of the debts of the business is ________ liability

Unlimited

What is considered a disadvantage of a sole proprietorship?

Unlimited liability

When two firms operating in different stages of related businesses join, it is called a _______ merger.

Vertical

a legal entity with authority to act and have liability apart from its owners is a:

corporation

A sole proprietorship has a limited life span unless:

it is sold to someone else it is taken over by an heir