Exam 3: Selecting a Form of Business Ownership

Major advantages of a partnership over a sole proprietorship include having diverse management talent and the ability to sell shares of stock to the public to raise operating funds.

Because it restricts the transferability of its stock, Generation Now is a _____ corporation.

The most important benefit of incorporation is the continuity to which shareholders are exposed.

Under the ____ form of ownership, any money borrowed by the business is loaned to the owner personally.

Profits earned are taxed as personal income and there are no special taxes to pay in the sole proprietorship form of business ownership.

"How much control do you want?" is not a major consideration when starting a new business.

In a limited partnership, a single _____ runs the business and is responsible for all of the business liabilities.

How did Ben Cohen and Jerry Greenfield start one of the best-known ice cream companies in the country?

Jane, Karla, and Brenda have set up an accounting firm.An essential part of their partnership agreement is the division of the business income.

Corporations are owned by shareholders who invest money in the business by buying shares of stock.

Scenario-Based Rock City is a community in the Midwest with a population of 23,000 people. Three dental clinics serve the city and the surrounding area.Perfect Smile is owned and operated by the newest dentist in town, Dr.Martin Harris, who employs one dental assistant and a secretary/receptionist.Drs.Joan Bennett and Joseph Young jointly operate Teeth for Life and provide a few more services than Dr. Harris.Rock City Dental Clinic has been in business for 58 years, employs 38 people, and offers a range of services that include dentures, orthodontics, and minor oral surgery. -Given the size of his operation and the fact that he's just opened his office, Dr.Harris is probably organized as a _____.

If a sole proprietorship incurs a debt or suffers a catastrophe, the owner is personally liable for it.

Discuss the motivations behind mergers, acquisitions, and takeovers.

CEO, Jack Yates oversees the operations of Johnson Company, a corporation with 1,200 employees.Yates reports to the company's board of directors. Who owns Johnson Company?

Compare and contrast mergers and acquisitions.

In deciding on a legal form of organization, you should ask yourself all of the following questions except______________.

Scenario-Based Scuffy the Tugboat is a family-run business that makes tugboats.It is owned by three brothers, Jack, Frank, and Bob.Their first tugboat is still towing ships in Boston Harbor, and over the years, success has allowed them to grow the company by plowing money back into it.Now, however, they want to expand but they are not sure how they should do this.They are also unsure about which legal form of organization is best for them. -Scuffy the Tugboat could not operate as a sole proprietorship.

Explain and give an example of the concept of unlimited liability in a partnership.

Who is considered hostile in a hostile takeover?

In a corporation, all of the owners help run the business.