Exam 6: Forms of Business Ownership

Management and ownership roles would most likely be separate in what type of business structure?

The profits of a sole proprietorship are taxed as the personal income of the owner.

Arthur is a truck driver who owns his own business. He has been on the road for several months, and the constant wear and tear on his truck results in the need for several major mechanical repairs. This generates a loss for his business. Which of the following reflects how this will affect Arthur's tax obligation?

A not-for-profit corporation such as a church or ministry may be exempt from ________.

In a sole proprietor ownership, if business assets are not enough to pay business debts, then personal assets, such as the sole proprietor's house, personal investments, and retirement plans can be used to pay the debt. This is called ________.

In a partnership, the type of partner that is responsible for all claims against the company is called a(n)________.

All of the following are advantages of forming a corporation EXCEPT ________.

S corporations are restricted to a limited number of owners, whereas limited liability companies can have an unlimited number of owners.

A(n)________ occurs when two companies of about the same size mutually agree to create a new combined company.

Which of the following moves would MOST likely initiate a hostile takeover?

Sarah, Mike and Mark are dentists who would like to form a partnership. They have decided to form a limited liability corporation. Explain why this is a good choice for their dental practice.

Like partnerships, shareholders in an S corporation pay income taxes based on their proportionate share of the business profits.

Lizzie is the CEO of a large corporation that offers accounting services to several companies. She has tried to acquire her closest rival, but her rival's management is opposed to the idea. In order to gain a competitive edge, Lizzie starts a campaign to persuade her rival company's shareholders to vote out its existing management in the hopes of replacing it with a management team more sympathetic to the goals of the acquiring company. Which method of acquiring a company is Lizzie using?

Not-for-profit organizations are NOT required to incorporate.

Limited liability companies are unable to offer stock options or stock bonus incentives to their employees because ________.

Many new business owners prefer a limited liability structure because there are ________.

Ben recently purchased 100 shares of stock in Feger's Sports, Inc. Ben is a(n)________ of Feger's Sports, Inc.

If a corporation provides medical insurance, it will actually lower the company's taxes because ________.

Which of the following is a benefit of forming a corporation?

Which of the following types of ownership is limited to 100 owners?