Quiz 4

Articles of Incorporation do not include: -the classes of stock -the minimum capital requirements -the objective of the coporation -the name and address of the corporation -a list of all stockholders' names

a list of all stockholders' names

Ottens Flavors, Philadelphia, announced its combination with MK Flavors,& Co., Mexico City. The Mexican operation will offer the U. S.-based company an increased market presence in Central and South America. The new company will be renamed MK Ottens Flavors. MK Ottens Flavor was created through a(n): -acquisition -voluntary union -conglomerate -merger -joint venture

acquisition

The purchase of one company by another with no new company being formed is called a( n ) _____. -acquisition -merger -hostile takeover -investment

acquisition

Jayson Tully is contemplating the purchase of a Popeye's Chicken franchise. Tully has made a list of the disadvantages that he assumes he will face as a new business owner. Which of the following is actually an advantage? -conformity to operating procedures -royalty fees -assistance in building plans -up-front franchise fee -defined territory

assistance in building plans

A______________________merger brings together companies in unrelated businesses to reduce risk. -conglomerate -combination -horizontal -vertical -cooperative

conglomerate

In deciding on a legal form of organization, you should ask yourself all of the following questions except______________ -do you want to share the profits with others -do you have all the skills needed to run the business -how many employees will you hire -what are your financing needs

how many employees will you hire

A very important consideration in picking a legal form of business is: -how long you plan to run the business -how much legal liability you are willing to accept -how successful you believe your business will be -how many competitors you expect to have

how much legal liability you are willing to accept

Which of these statements is true in regard to the sole proprietorship form of business? -you are required to share profits with others -if you die, the business continues -if the company borrows money from a bank, you are not personally liable for the debt -it makes financing more difficult

it makes financing more difficult

Hard Rock Cafe International and Sol Melia Hotels and resorts have allied to develop a multimillion-dollar hotel. This relationship is a _____________________-because their alliance will end as soon as the hotel is completed. -general partnership -C corporation -cooperative -limited-time partnership -joint venture

joint venture

___________________________are corporate takeovers financed by large amounts of borrowed money -leveraged buyouts -amortized mergers -financed mergers -liquidity corporations -debt acquisitions

leveraged buyouts

in a( n ) _____ partnership, a single partner runs the business and any number of other partners have little involvement in it: -general -limited -unlimited -corporation

limited

the most important benefit of incorporation is the _____ feature of corporations -limited continuity -limited liability -financial resources -unlimited liability

limited liability

which of the following is not an advantage of a partnership (relative to a sole proprietorship)?: -inexpensive to set up -makes financing easier -benefits from diverse management talents -limited liability

limited liability

What advantage(s) does the S-corporation give to the small business owner that the regular corporation does not give to the small business owner? -limited liability protection -more favorable tax treatment -complete control over the business -the small business owner can keep all of the profits

limited liability protection

the _____ in a limited partnership has(have) limited involvement in the business and suffer loss only to the extent of their business investments: -limited partners -general partner -senior partner -managing partner

limited partners

The combination of two companies that join to form one company is called a: -conglomerate -voluntary union -merger -joint venture -cartel

merger

a( n ) _____ occurs when two companies join together and form a new company: -acquisition -merger -hostile takeover -joint venture

merger

As attorneys who share equal ownership, profits, and losses in their firm, Raymond James and Alexander Doss have opted for which legal form of business ownership? -partnership -sole proprietorship -limited liability corporation -s corporation

partnership

A disadvantage of franchising to the franchisee is: -national name recognition -ongoing management training program -standardized operating procedures -restricted operating freedom -assistance in site location

restricted operating freedom

Which of the following is not a requirement of an S-corporation? -maximum of 100 stockholders -each stockholder must be a U.S. citizen or resident -revenues must be at least than $1 million annually -all stockholders must concur with the decision to form the S-corporation

revenues must be less than $1 million annually

As a limited liability company (LLC), Miller Shipping would closely resemble a( n ) _____. -s-corporation -partnership -cooperative -sole proprietorship

s-corporation

which of the following statements is not true about sole proprietors: -they are willing to risk their own resources to start a business -they need a lot of money from others to start a business -they want to minimize the costs of getting started -they risk their personal assets for the business

they need a lot of money from others to start their business

Which of the following is a disadvantage associated with a partnership? -flexibility -diversity of management -unlimited liability -possibility of more available credit -ease of information

unlimited liability

which of the following is not true for a sole proprietor -you have to complete control over your business -you get all the income earned by the business -you have limited liability -any profits earned are taxed as personal income

you have limited liability

Which of the following statements about cooperatives is true? -cooperatives cannon legally compete with taxable entitles -cooperatives have the same liabilities as partnerships -cooperatives have a limited life span -cooperatives increase their members buying power

cooperatives increase their members buying power

A corporation pays taxes on its earnings. When the earnings are distributed as dividends, the shareholders pay taxes on these dividends. This is called _____. -corporate and personal taxation -double taxation -excessive taxation -tax burden

corporate and personal taxation

A _____ is entirely separate from the parties who own it. -corporation -limited partnership -general partnership -unlimited partnership

corporation

When it distributes a portion of its income to shareholders in the form of cash payments, a corporation pays out _____. -dividends -shares -allotments -capital surpluses

dividends

in a limited partnership, a single _____ runs the business and is responsible for all of the business liabilities -senior partner -CEO -general partner -limited partner

general partner

Under the ____ form of ownership, it's important to have an agreement about conditions for settling disputes. -general partnership -limited partnership -corporation -sole proprietorship

general partnership