Intro-Into-Business: Ch. 5 Learn Smart: Practice

A corporation is defined as:__________

A chartered legal entity with authority to act apart from its owners

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

Acquisition

In a franchise, having management support from the franchisor is a(n)_________ whereas the coattail is effect is considered a ________

Advantage and Disadvantage

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

Boss

If a software company and a snack food company merged, it would be called a(n) __________ merger.

Conglomerate

Among the reasons that disagreements can ruin a partnership are:__________

Disagreement over workload, opposing management styles, and arguing over profits

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

Diverse

Which are considered disadvantages of incorporating?

Double Taxation, Initial Cost, and Extensive paperwork

When the corporation pays a tax on its profits and individual stockholders each pay tax on dividends distributed by the corporation, it is called:__________

Double taxation

T/F: If you and a friend start a business together, you have started a sole proprietorship.

False

T/F: In a limited partnership, the liability of the limited partners is unlimited and personal assets are at risk.

False

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

General partnership

The attributes of a corporation:

Liability separate from owners, state chartered, and legal entity

Although members may choose to reconstitute an LLC after it dissolves, limited ___________ __________ is considered a disadvantage of this form of business.

Life span

An S corporation has the liability protections of a corporation but is taxed:_________

Like a partnership or sole proprietorship

Bob and Dan are doctors in a medical practice. Dan is being sued for malpractice, but it will not affect Bob's assets because they formed a(n) __________ __________ partnership.

Limited liability

When there is one or more general partners and one or more limited partners, the firm is a(n):__________

Limited partnership

The disadvantages of a sole proprietorship:

Management difficulties, unlimited liability, and limited financial resources

Items considered fringe benefits that people working for a company are likely to receive, but a sole proprietor has to develop on his own:

Paid sick or vacation leave time, paid health insurance, and a pension plan

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

Partnership

Advantages of home-based work include:

Relief from commuting stress and low overhead expenses

Home-based franchises have many advantages such as:__________

Relief from the stress of commuting and low overhead expenses

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 franchises and customers

Technology

Ending a partnership can be difficult because of problems deciding:__________

The worth of a retiring partner's share, when a partner can retire, and how to distribute assets

Many franchises are expanding internationally because:

There are large new markets available

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

A major factor to consider in forming a partnership is the ability of partners to provide additional __________ resources.

Financial

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

Hold annual meetings, keep minutes, and file written resolutions

Long hours and a feeling of isolation are two disadvantages of __________-__________ franchises.

Home-based

When a sole proprietor leaves an ongoing business to future generations, it is said that the owner is leaving a __________.

Legacy

What are some of the disadvantages of operating a franchise?

Management regulation, Shared profit, and Large start-up costs

The owner of a sole proprietorship must pay these taxes:

Social Security and Medicare, Estimated income tax payments and Personal income tax

Ease of formation is an advantage of a(n) __________ __________.

Sole porprietorship

The process of forming a corporation:

Th articles of incorporation are usually filled in the state in which the company will be incorporated and the bylaws of the corporation describe how the firm is to be operated

The joining of two films in the same industry is a(n) __________ merger.

Vertical

A disadvantage of buying a franchisee is:_____

Paying a share of profits as royalties

Rank the forms of business ownership based on ease of starting. Put the easiest form at the top.

1.) Sole proprietorship 2.) Partnership 3.) Corporation

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

Franchise agreement

A merger between a soft drink company and an artificial sweetener maker could be considered a(n) __________ merger.

Horizontal

The __________ cost of incorporating can be expensive because of the need for accountants and lawyers to get started.

Initial

A sole proprietorship has a limited life span unless:__________

It is taken over by an heir and it is sold to someone else

A __________ __________ can be initiated by employees, managers, or investors who borrow necessary funds to purchase all shares of a firm's stock.

Leveraged buyout

The result of two firms (usually corporations) combing to form one company is called a __________.

Merger

Of the various forms of business ownership, a __________ is an easy way for two individuals to conduct business.

Partnership

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

Sole proprietorship

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

The responsibility of the owner of a sole proprietorship for all the debts of the business is __________ liability

Unlimited

In a sole proprietorship, any debts or damages incurred by the business are your personal debts and you must pay them. This disadvantage is known as:

Unlimited liability

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

Websites, e-commerace, and technology