Business 101 Ch.4

Which of the following is a legal document that the state issues to a company based on information the company provides in the articles of incorporation?

Corporate charter

What is a sole proprietorship?

A business that is owned (and usually operated) by one person.

What is the term for a corporation chartered by a foreign government that is conducting business in the United States?

Alien corporation

Which of the following is an advantage of corporations?

Limited liability

Which form of business ownership provides limited liability, as in a corporation, but is taxed like a partnership and is not restricted on the number of allowed stockholders? a. Corporation b. Sole proprietorship c. Limited-liability company d. S corporation e. Limited partnership

Limited-liability company

Which of the following is an advantage of partnerships? a. Pooled financial resources b. Limited liability c. Perpetual life d. Unlimited liability

Pooled financial

What association might be formed because no one person or firm is willing to put up the entire amount required for the undertaking of a project; for example, to underwrite a large insurance policy or investment? a. Limited-liability company b. Syndicate c. Not-for-profit corporation d. S corporation e. Joint venture

Syndicate

Which of the following is NOT usually stated in the articles of partnership? a. How profits will be distributed b. Each partner's management role c. Assets each partner has contributed d. What happens if a partner wants to dissolve the partnership or dies e. The value of each partner's retirement accounts

The value of each partner's retirement accounts

A disadvantage of a partnership where remaining partners are unwilling to buy the share of a partner who retires can be referred to as _______________. a. additional tax liability b. lack of continuity c. a frozen investment d. unlimited liability e. retention of profits

a frozen investment

A(n) _______ corporation is a corporation whose stock is owned by relatively few people and is not sold to the general public; while, a(n) _______ corporation is one whose stock can be bought and sold by any individual.

closed; open

The joining of firms in completely unrelated industries is a(n) _______.

conglomerate merger

A ______ partner has responsibility or liability for losses beyond their investment, but a ______ partner only has liability for the amount they invest.

general; limited

A merger of two firms in the same industry that allows the companies to diversify or expand their products is a(n):

horizontal merger.

A partnership established for a specific project or for a limited time (for example a U.S. company joining with a foreign firm to enter new markets) is called a(n): a. S corporation. b. limited partnership. c. general partnership. d. syndicate. e. joint venture

joint venture

Which of the following is a special type of stock whose owners cannot vote regarding the running of the company, yet have a priority claims to profits?

preferred

Which of the following is an advantage of a sole proprietorship?

retention of all profits

One of the big differences between corporations and S corporations is how profits are: a. allocated. b. calculated. c. distributed. d. taxed. e. reinvested.

taxed

Each corporate stockholder's financial liability is typically limited to

the money he or she paid for the corporation's stock.

_____________ is a legal concept that holds a business owner personally responsible for all the debts of the business.

unlimited liability

A key disadvantage of a general partnership is: a. additional regulations. b. extensive paperwork. c. additional tax liability. d. difficult to start-up. e. unlimited liability.

unlimited liability.