learnsmart chapter 5 how to form a business

This is considered an advantage of corpoation a) double taxation b) corporation must make information abailable to their owners c) ease of transfer of ownership

c

Among the advantages of farm cooperatives for their members is that they a) require all to agree to changes b) pay higher taxes, but not for individuals c) do not pay taxes as corporation do d) increase economic power

c and d

A corporation can sell __ to anyone who is interested to raise money for investment

stock

When the corporation pays a tax on its profits and individual stockholder each pay tax on dividends distributed by the corporation, it is called ___ a) double taxation b) splitting the stock c) return taxes

double taxation

Which form of ownership is nontransferable because there is no stock?

LLC

a partnership __ can spell out the requirements of terminating a partnership

agreement

The start-up costs of filing for incorporation are high because a) lawyers and accountants are needed to do the complex filings b) partnership agreements are lengthy c) the federal government charges very high fees

a

Advantages of home-based work include a) low overhead expenses b) relief from commuting stress c) less feeling of isolation from the company d) shorter work hours

a and b

What are some of the disadvantage of an LCC? a) ownership is not transferable b) more paperwork than sole proprietors c) inital costs d) unlimited liability

a and b

If the owner of a sole proprietorship wants to incorporate, the following disadvantages must be considered a) cost of incorporation b) double taxation c) risk of unlimited liability d) limited lifespan

a and b.

Ending a partnership can be difficult because of problems deciding a) the worth of a retiring partner's share b) how a partner can retire c) how to distribute assests d) whether to pay the taxes

a, b and c

Which are the attributes of a master limited partnership a) taxed like a partnership b) acts like a corporation c) traded on the stock exchange d) owned by one person

a, b and c

What are some of the advantages of franchising a) large up-front costs b) recognized name c) shared profits d) lower failure rates e) personal ownership

a, c and e

LLC do have to submit articles of organization and an operating agreement, but do not have to a) keep mintues b) pay self-employment taxes c) file written resolutions d) hold annual meetings

a, c, and d

A key benefit that only corporation can offer to attract skilled employees is a) prescription coverage b) stock options c) trips to conferences d) paid time off

b

LLC's are considered to have operational flexibility because while they must submit articles of organization, they are not required to a) provide employee benefits or pay taxes b) distribute profits or keep meeting minutes c) keep minutes or hold annual meetings d) pay taxes or hold annual meetings

b

Studies have indicated that partnership are four times likely to succeed than a) LCC's b) sole proprietorships c) MLP's d) S-Corporations

b

Select the attributes of a corporation a) unlimited liability b) legal entity c) state chartered d) liability separate from owners

b, c, and d.

An individual who incorporates files a) only a joint tax return b) only a corporate tax return c) an individual and a corporate tax return

c

Having members work a certain number of hours or electing a board of directors that hires professional management are two ways a ___ is managed

cooperative

Except for states like Delaware and Nevada, ___ creates a disadvantage to incorporating a) double taxation b) attracting new talent c) transfer of ownership d) extensive paperwork

d

In a leveraged buyout, employees, managers, or investors finance the purchase of the company by a) selling commodities b) using cash c) selling equity d) borrowing against its assets

d

When a corporation is separate from its owners and does not terminate with the death of one owner, the corporation has a) unlimited value b) perceptual life c) limited life d) perpetual life

d

Which of these is a disadvantage of a limited liability companies? a) flexible ownership rules b) limited liability c) choice of taxation d) no stock

d

Leaving a __ means owners can leave an ongoing business for future generations

legacy

A LLC submits a written operating agreement, similar to a __ agreement, describing how the company is to be operated

partnership

___ do not pay taxes when submitting the organization's tax return to the IRS; the tax return simply provides information about the profitability of the organization and the distribution of profits

partnership

one of the fasted growing franchise sectors is __

senior care

Rather than merge assets or sell to another company, a firm is taken private when management, or a group of stockholders, obtain all of the firm's __

stock

Conflict may present if ___ elect a board of directors who disagree with management

stockholders

Burger King and Gymboree were publicly traded companies until a group of stock holders regained all the firms' stock in order to regain control. This is referred to as ___ a firm ___

taking , private