Chapter 5
an agreement that gives a business the right to use business's and sell a product or service in a given area is a ____
franchise agreement
form a business where all owners will share and operate a business and in assuming liability for business debts is a _____
general liability
joining of two firms in the same industry
horizontal merger
an advantage of sole proprietorship is _________
independent decision making
sole proprietors can leave their business to heirs: this is called _______
leaving a legacy
attempt by employees, managers, investors, who barrow necessary funds to purchase all shares of a firms stock
leveraged buyout
an S corporation has the liability protections of a corporation but is taxed
like a partnership or sole proprietorship
stockholders liability for losses only up to the amount they invest is called _______
limited liability
one company's purchase of the property and obligations of another company
acquisition
legal documents that the creators of a cooperation must file with the appropriate state office are referred to as ____
articles of incorporation
poor publicity at a fellow franchise location u notice sales at your location have decreased this is ___
coattail effects
a _______ is a chartered legal entity with authority to act and have liability separate from its owners
conventional (C) corporation
an LLC submits a written operating agreement similar to a _____ agreement describing how the company is to be operated
partnership agreement
termination of a partnership is difficult without a ______ agreement
partnership agreement
one of the fastest growing franchise sectors is
senior care
a _____________ is the most common form of business ownership
sole proprietorship
a business that is owned and managed by one person
sole proprietorship
the failure rate of a franchise is lower than other business ventures true or false
true
when working for a company a comprehensive benefit plan may add up to 30% or more in workers salary? true or false
true
which of the following is a disadvantage of sole proprietorship?
unlimited liability
popular businesses for franchising
1. automobile collision shops 2. fast food restaurants 3. restraunts
sole proprietorship has an unlimited life span unless
1. it is taken over by a heir 2. it is sold to someone else
the responsibility for a loss only up to the amount invested
limited liability
how can disagreements ruin a partnership
1. opposing management styles 2. disagreement over workload 3. arguing over profits
advantages of franchising
1. recognized name 2. lower failure rate 3. personal ownership
minority businesses grow at more than ___ times the national rate
6
joining of firms in completely unrelated industries
conglomerate merger
when producers, consumers, or workers with similar needs pool resources for mutual gain is called _____
cooperative
a cooperation is a legal ______ with authority with authority to act and have liability separate from its owners
entity
join together to get better prices for their food products
farm cooperative
an investor concerned about failure should consider investing in a ____ due to low failure rate
franchise
Taylor and Heather are doctors in a medical practice. Heather is being sued for malpractice but it will not effect Taylors assets because they formed a _____ _____ partnership
limited liability partnership
Morgan and Tracy have decided to form a partnership. Morgan will not have management responsibility but will invest money in the business. Morgan is considered a _______ partner
limited partner
when two firms join together to form one new company is called a ______
merger
a legal form of business with two or more owners
partnership
stockholders are _______ from the managers and employees of the firm because they are not actively involved in operations of the firm
separate
a merger between a soft drink company and a artificial sweetner maker would be considered a _____ merger
vertical merger
home based franchises have many advantages
1. relief from the stress of commuting 2. extra time for family activities 3. low overhead expenses
