BA 101 Ch. 5 7A

Which of the following are true regarding the process of forming a corporation.

- The articles of incorporation must be filed in the state in which the company will be incorporated - The bylaws of the corporation describe how the firm is to be operated

Which of following are true about the advantages and disadvantages of being a franchise owner:

- While the upfront costs of a franchise may be steep, a franchise has a better chance of succeeding than starting a business from scratch - Having a nationally recognized name for your business in a franchise can help with marketing and awareness

Ending a partnership can be difficult because of problems deciding:

- how to distribute assets - the worth of a retiring partner's share - when a partner can retire

LLCs do have to submit articles of organization and an operating agreement, but do not have to:

- keep minutes - hold annual meetings - file written resolutions

Which are considered disadvantages of incorporating?

Double Taxation Extensive paperwork Initial Cost

What are some of the disadvantages of a corporation?

Double taxation Cost of forming a corporation

A unique government creation that looks like a corporation but is taxed like a sole proprietorship or partnership is called a(n) __________ corporation.

S

A franchise owner will experience the coattail effect when:

a fellow franchisee does something that has an impact on growth and profitability

A(n) ______ is where one company purchases the property and obligations of another.

acquisition

In a franchise, having management support from the franchisor is a(n) ___________ whereas the coattail effect is considered a __________.

advantage; disadvantage

A partnership ___________ can spell out the requirements of terminating a partnership.

agreement

An advantage of the separation of ownership from management in corporations is that the company can raise money from investors but the investors:

are not involved in daily operations

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

boss

In addition to the articles of incorporation, a corporation has ____________ , which describe how the firm is to be operated from both legal and managerial points of view.

bylaws

When producers, consumers, or workers with similar needs pool their resources for mutual gain, they start a(n):

cooperative

A state-chartered legal entity with authority to act and have liability separate from its owners is a:

corporation

Many brick and mortar franchisees are using ______ to expand their businesses online to lower costs and better meet the needs of their customers.

e-commerce technology websites

A corporation is a legal _________ with authority to act and have liability separate from its owners.

entity

One of the most important advantages of the sole proprietor form of ownership is that a business owner:

finds it easier to start and end the business

Many minority business owners prefer a(n) ________ because it offers business connections and support.

franchise

Ed has decided to purchase and follow a business format by becoming a franchisee. The ________ __________ he will sign gives him the right to use the business name and sell the products of the firm.

franchise agreement

Mark, Cal and Aidan have decided to form a business where all owners will share in operating the business and in assuming liability for the business debts. They are most likely forming a(n) ____________ partnership.

general

A partnership where all owners share in operating the business and in assuming unlimited liability for the business's debts is a:

general partnership

LLC's 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

When two firms join together to form one new company, it is called a(n) ___________.

merger

About 30 percent of franchises are owned by African Americans, Latinos, Asians, and Native Americans. Franchisors are becoming more focused on recruiting _______ franchisees.

minority/diverse

A key advantage of a home-based franchise is low _________ costs, which can be ongoing. These are the costs associated with rent, utilities, and other fixed costs.

overhead/operating

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

personal

A business that is owned and managed by one person is a(n)

sole proprietorship

If you start and manage a landscaping business on your own, you have likely started a:

sole proprietorship

Studies have indicated that partnerships are four times more likely to succeed than:

sole proprietorships

An advantage of partnerships is a longer ____________ rate than sole proprietorships, because they become more disciplined and the business's life is based on all the partners.

survival

Gathering leads on a company website, selling products and keeping up to date on news via email, and chat rooms all serve as examples of using __________ to assist franchisees and customers.

technology

Because of the poor publicity at a fellow franchise location, you notice that sales at your location have decreased. The impact of the poor publicity on your company is referred to as

the coattail effect

Many franchises are expanding internationally because:

there are large new markets available

One of the most notable advantages of an online franchise is

there is no brick-and-mortar real estate cost.

If your company's debts or damages are solely your responsibility you could be experiencing the disadvantage associated with owning a sole proprietorship called:

unlimited liability

Home-based franchises have many advantages, such as:

- relief from the stress of commuting - low overhead expenses

Rank the order in which members of a corporation are chosen in order to separate ownership from management. Start at the top of the managerial hierarchy.

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

True or false: The main advantage of a sole proprietorship is ease of start up.

true

Advantages of starting an online franchise are:

- no upfront fee may be required - franchisees pay only a set monthly fee - online franchisees can compete in world markets