Civics: Ch 19 final
How are partnerships formed? What legal document should be signed? What does this document do?
- It is now a partnership—a business that two or more people own and operate together. -partnerships often start as sole proprietorships. In some cases, a single owner cannot raise enough money to expand the business. -A partnership is formed when two or more people sign a legal agreement called articles of partnership. - This document states what role each partner will play in the business. It tells how much money each will contribute.
What are the disadvantages of a partnership?
-The main drawback of a general partnership is the same as that of a sole proprietorship. Each partner has unlimited liability. He or she is fully responsible for all the debts of the business. What does this mean? Suppose that you are in a lawn mowing business with two partners. Each of you would get one-third of the business profits. But suppose that one of your partners buys an expensive new mower at the end of the season as your business income drops. Or suppose that one of the business's customers gets hurt by your equipment or the mower throws a stone through a car windshield. The business could be sued. If neither the business nor your partners have enough money to cover the debt or the damages, you would have to pay 100 percent of the cost out of your personal funds.
What is a corporation? How can you tell that a business is a corporation?
-The third major form of business is very different from either a sole proprietorship or a partnership. This third form is the corporation. A corporation is a business that is owned by a group of people and operates under a license. A corporation is the most complicated form of business. You can tell that a business is a corporation if the abbreviation Inc. follows the company's name. Inc. stands for "incorporated."
What three responsibilities do businesses have to consumers? Explain.
-must sell products that are safe and that work properly -tell the truth in their advertising -treat all customers fairly
What is a board of directors? How is a board of directors selected? What is their job?
A board's members, called directors, are elected by the corporation's shareholders, and are considered responsible to them, not the founders or officers of the company. ... Because of this, directors should be experienced professionals that are able to provide expertise in both corporate and industry matters.
What legal recognition do state governments give corporations? How does this work?
A corporation is legally recognized by state governments as a body that is separate from the people who own it. Under the law, a corporation has the rights and responsibilities that an individual has. Like a real person, a corporation can enter into contracts, sue and be sued, own property, and pay taxes.
What is the AFSCME and how many members does it have? Who belongs to this group?
American Federal of State, Country, and Municipal Employees prison guards, garbage collectors, and school nurses are part of this union some government workers, like police officers and firefighters, have their own unions
What is the AFL-CIO? How many members does this group have?
American Federation of Labor and COngress of INdustrial Organizations nation's largest labor group 12 million members
What are the disadvantages of a corporation?
Double taxation. Depending on the type of corporation, it may pay taxes on its income, after which shareholders pay taxes on any dividends received, so income can be taxed twice. Excessive tax filings.
Do the advantages of a partnership outweigh the disadvantages? Why or why not?
No I do not because if you are a smart businessman you will be aware of these disadvantages and learn how to deal with them because you should know what you are getting yourself into.
How can partnerships be organized?
Partnerships can be any size. Some can be as small as two partners, with no employees. In some fields, such as medicine or law, a small firm of four or five partners may be just the right size for the market it serves. Other partnerships, such as major law or accounting firms, may be huge businesses. In these companies, there may be hundreds of partners providing services in many different locations across the United States.
Do the advantages of a sole proprietorship outweigh the disadvantages? Why or why not?
Sole proprietorships have several advantages over other business entities. They are easy to form, and the owners enjoy sole control of the business profits. However, they also have disadvantages, the biggest of which being that the owner is personally liable for all business losses and liabilities.
What are stocks? How do stocks work? Why do companies sell stocks?
Stocks are an investment in a company and that company's profits. Investors buy stock to earn a return on their investment. Simply put, stocks are a way to build wealth.
What is the NLRB? What is the NLRB's job?
The National Labor Relations Board (NLRB) is a federal agency founded by Congress in 1935 to administer the National Labor Relations Act (NLRA). The NLRB safeguards employees' rights to organize and to decide whether or not to have unions serve as their bargaining representatives with their employers.
What are the advantages of a partnership?
The biggest advantage that partnerships have over sole proprietorships is that they can raise more money. Businesses use money to grow and to hire more employees. A partnership has more than one owner, so it usually has more capital to work with than a sole proprietorship does. It is also easier for a partnership to borrow money from a bank. The current partners can also add new partners to provide additional funds. Sometimes the new partners will be limited partners.Another advantage of partnerships is that each partner often brings special talents to the business. For example, one partner in an insurance agency may be good at selling polices to new customers. The other partner may be better at providing services to people who already have policies. This business will probably be more successful as a partnership than it would be if just one person owned and operated it.
What are the advantages of a corporation?
The corporation's biggest advantage is the ease of raising financial capital. It can raise huge amounts of money by selling stock. It can also borrow money by selling bonds, which are certificates of agreement between a borrower and a lender. It can then use that money to expand operations, open up businesses in new locations, or buy new equipment. It can also raise money to research new products. This ease of raising money is one reason that the corporation is the most common form of business for large companies.
What are the advantages of a sole proprietorship? What are the disadvantages?
The main disadvantages to being a sole proprietorship are: Unlimited liability: Your small business, in the form of a sole proprietorship, is personally liable for all debts and actions of the company.
Why would some people choose to form a partnership?
They share the assets and profits, as well as the liabilities and management responsibilities for running the business. ... Each partner can also deduct losses from the business on his or her own individual tax return. This pass-through tax treatment is one of the most beneficial advantages of forming a partnership.
What are some examples of liability that a sole proprietor might have to be concerned about?
This can be a problem if the business cannot pay its debts or loses a lawsuit. Then the owner's personal property—such as a home or car—may have to be sold to pay the business's debts.
What happens when a sole proprietor is liable for a debt but his or her business does not have the money to repay it?
This can be a problem if the business cannot pay its debts or loses a lawsuit. Then the owner's personal property—such as a home or car—may have to be sold to pay the business's debts.
What is financial capital? What is it used for?
This is the money needed to run a business or expand it. Unless the business is run from the owner's home, he or she must buy or rent the place from which it operates.
What is an injunction? How does an injunction work?
a court order to stop some kind of action. the company may ask the court to limit picketing or to prevent or stop a strike
How has membership of labor unions changed in the last 40 years? What factors have led to a change in union membership?
a decline in the union membership went from 1 in every four workers belonged to a union to now 1 in every 8 belong in a union the shift from manufacturing jobs to service jobs
When it comes to union organization, what is the local? What does a local consist of, and what do locals collectively form?
a local consists of all the members of a particular union who work in one factors, one company, or one geographical area all of the union's locals together form the national union. this organization represents the locals and their members on a national level
What is mediation? How does mediation work?
a situation in which union and company officials bring in a third party to try to help them reach an agreement.
How much control does stockholders have over a corporation?
a stockholder is entitled to cast one vote for each position on the board of directions. the board of directors meets during the year to make major decisions about the corporation
What does the term picketing refer to? What is the goal of picketing? What does it mean when a worker crosses the picket line?
a union tactic in which striking workers walk with signs that express their grievances. goals are to embarrass the company and to build public support for the striker. they hope to discouarge other workers from crossing and going into work
What is a modified union shop? How does a modified union shop work?
a worker does not have to join a union. if workers do join the union, they must remain in the union as long as they hold their job.
What is a sole proprietorship? What decisions does a proprietor make for his/her company?
also called simply a proprietorship—is a business owned by one person. Most businesses in this form are small businesses. - Sole proprietors are their own bosses. They decide what products or services they will sell. They decide what hours the business will be open. They make decisions without having to consult, or check with, other owners. As the only owner, a sole proprietor receives all the profits from the business.
What is a foundation? Why do many company's start their own foundations?
an institution created to promote the public good
What is a labor union?
association of workers organized to improve wages and working conditions
How do unions form in a workplace?
cannot form a union unless a majority of them vote in a favor of it
What is a union shop? How does a union shop work?
companies can hire any person as an employee one someone is hired, though, he or she must join the union shortly after starting to work
What do employers typically do during a lockout? Why?
companies often hire replacement workers so it can continue its business.
How has employer provided health insurance been impacted over the years?
cost has increased
Do the advantages of a corporation outweigh the disadvantages? Why or why not?
disadvantages- government regulates more, have to make finance records public, release reports on expenses and profits, must hold annual stockholders meeting advantages -the ease of raising financial capital (huge amount of money thru selling stock)-ownership can easily be transferred - limited liability:responbile for debts not owners (protection from losing personal property if deal goes bad)
How can the government get involved in a strike? How does this process work?
federal law allows the president to order a cooling off period during which the workers must return to work while the union and the employer's must try to reach an agreement. this period lasts 80 days, if there is no agreement after that time, the workers have the right to go back on strike
What is the difference between a general partnership and a limited partnership? Explain.
general partnership: all partners share business and are all responsible for some of its managements and debts. limited partnership: partners own a share of the business, but they dont have direct involvement in running or managing it. they usually just provide money the business needs to operate. general partners run the business; limited partners provide for the business, but don't run it.
How can small businesses get involved in their communities? How does this type of involvement benefit small business?
give to schools, help firms provide free things to the poor
What philanthropic work has Bill Gates done through his foundation?
given away some $23 billion--100 mil to Tampa FL public schools, 250mil to fight disease in africa, asia and south america
What philanthropic work has American Express been involved in?
gives money to relief agencies that use money to provide food, clothing, and shelter for the victims another program helps groups that are trying to preserve important historical sites or natural areas
How do employers benefit from helping their workers?
good health =less missed work, more energy= more productive
What benefits can companies provide to their employees?
health insurance, cost of trade school and college, programs to stop smoking, provide child care or fitness center
How have unions changed over time? Give examples.
in the past, there were formed mostly by industrial workers the growth in the number of government workers belong to unions than do workers for companies about 1.6 million workers belong to the American Federal of State, Country, and Municipal Employees (AFSCME) AFSCME is the largest union in the nation
How can the government get involved in a labor dispute by issuing an injunction? Why?
industries that are important to the economy or national security, the government can seek an injunction
What responsibilities do businesses have to their employees? Explain.
maintain a safe workplace no discrimination treat fairly cannot pay different wages to men and women who do the same work cannot fire workers for age
How can a union use an injunction against an employer?
may order the employer not to lock out its workers.
What is a partnership and how does it differ from a sole proprietorship?
partnership—a business that two or more people own and operate together. partnerships often start as sole proprietorships. In some cases, a single owner cannot raise enough money to expand the business. In other cases, the owner may have enough financial capital but not have all the skills needed to run the business well. In either case, the owner may seek a partner with the money or skills that the business needs to grow.
What did Congress do in 2010 to change health care in the US? Explain.
passed a law requiring businesses to provide health insurance
What is arbitration? How does arbitration work?
situation in which union and company officials submit the issues they cannot agree on to a neutral third party for a final decision... the third party listens to both sides and then decides how to settle the dispute. both parties agree in advance to accept the third parties decision
How can businesses help groups in their community?
sponsor local teams or shelters or events
What are right-to-work laws?
state laws forbidding unions from forcing workers to join ban union shops
How are corporations formed? What legal document should be signed? What does this document do?
state where it is formed grants the company a charter- gives a group of people permission to form a corporation - shareholders buy stock and elect board of directions B.O.D- represent shareholders makes designs, hires president preisdent- oversees daily - hires VP of sales, production and finance; they hire department heads; they hire employees
What roles do businesses play in society?
supply food, clothing, and shelter we use to meet basic needs. produce things that make life more enjoyable and comfortable
Explain the Enron scandal. How did Enron change the way government regulates corporations in the US?
the company claimed to earn millions in profit but its financial statements were false. the company went out if business and owed billions of dollars, thousands of workers lost their jobs- after that Congress passed a law requiring a company's principal officers to sign a statement promising that financial statements are correct and honest
What consequences can corporations face if they are not honest with their investors?
the government can prosecute them for breaking the law.
What does the term labor force refer to? How has the labor force changed in the US over the last 40 years?
the number of people 16 years or older who have jobs or are looking for work since 1970, the size of the labor force has nearly doubled
What does the term social responsibility refer to?
the obligation businesses have to pursue goals that benefit society as well as themselves
What is collective bargaining? How does this process work? What types of agreements would be made during collective bargaining?
the process by which union and employers negotiate the conditions of employment officials from the union and company meet to discuss the worker's contract. the contract sets the terms for working at the company (focus on wages and benefits and rules and working conditions: holidays breaks meals)
What does the term transparency refer to? Why is it important that corporations operate with transparency?
the process of making business deals or conditions more visible to everyone
If an employer decides to terminate an employee, what does that decision need to be based on?
the quality of the work
What is the Change to Win? How many members does this group have?
the second largest labor group 5.5 million members
What does liability mean?
the state of being responsible for something, especially by law.
How can strikes cause problems for workers? How do most strikes end?
they can drag on for months discouraging strikers. settled when the company
What power does the government have over industry in extreme cases?
they can temporarily take over a company or industry
What responsibilities do corporations have to stockholders? What do corporations release in order to protect stockholders?
they have to release financial reports on a regular basis
Why would a union ask people to boycott a company?
to put economic pressure on the company
What is the difference between a trade union and an industrial union? Give an example of each.
trade union a union whose members all work at the same craft or trade ex: unions formed by bakers and by printers industrial union a union that brings together skilled and unskilled workers from the same industry might have electricians, carpenters, and laborers who work together to manufacture a product ex: the United Auto Workers (UAW)
What is a lockout? How does a lockout work? Why would an employer use this tactic?
when management closes a workplace to prevent union members from working in hopes that the loss of income will force workers to accept the companies terms.
What is a strike? How does a strike work? Why can a strike put so much pressure on a company, or even an entire industry?
when workers deliberately stop working in order to force an employers to give in to their demands. all union workers refuse to work- it is designed to shut down the company or industry in which the workers labor. the companies lose money everyday they dont work
How do unions still play a role in the US today?
workers in many important jobs and industries belong to unions large numbers of coal miners, airline pilots, and truck drivers are union members unions have also seen gains in the public service sector, where teachers and government employees work
What is an agency shop? How does an agency shop work?
workers who do not join the union still must pay a fee to the union for representing them