Exam #2 Business

A franchise owner will experience the coattail effect when

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

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

acquisition

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

A corporation is formally formed with

articles of incorporation and bylaws

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

boss

A business owned and controlled through pooled resources by the people who use it is a(n)

cooperative

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

corporation

True or false: Partnerships are less likely to survive than sole proprietorships.

false

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

An agreement that gives a business the right to use a business's name and sell a product or service in a given area is a(n)

franchise

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

general partnership

Low overhead costs are an advantage of which type of business?

home bases businesses

Because of the difficulty in ending a partnership, decisions regarding which two areas should be spelled out in a partnership agreement?

how to distribute assets, when a partner can retire

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

In a general partnership, all partners share the responsibility for operating the business and assume ___ for the business's debts

liability

An S corporation has the liability protections of a corporation but is taxed ______.

like a partnership or sole proprietorship

Which is an advantage of the corporate form of business ownership?

limited liability

A form of business ownership that provides limited liability, as in a corporation, but has no special eligibility requirements is a(n)

limited liability company

Termination of a partnership is difficult without a(n) ______ agreement.

partnership

What can be said about the survival rate of partnerships as compared to sole proprietorships?

partnership are more likely to succeed

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

sole proprietorship

The easiest type of business entity to form is a

sole proprietorship

Unlimited liability as it relates to sole proprietorships is the risk of ______

the loss of personal assets

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

The result of two firms joining to form one is called a(n)

merger

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

true