Exam 5: How to Form a Business

Jamie and Maria invested all their savings in a small pizzeria they opened outside the University of Western Kentucky.They operated the business as a general partnership.After 11 months,the business went broke and Jamie and Maria were left with outstanding bills of $37,500,which was more than their initial investment in the company.Jamie and Maria can:

The S corporation form of business would be particularly attractive to fast growing companies that want to attract thousands of new stockholders.

When two firms who do not participate in the same industries,for example a software company and a fast food restaurant company decide to merge,the result is called a ____________ merger.

States may levy special taxes on corporations that are not imposed on other businesses.

If firms wish to gain market share in their current market,they would consider a conglomerate merger.

Joshua wants to run his own business.A friend suggested that an inexpensive way to get started is to buy a franchise,where he will have the freedom to run it exactly as he sees fit.As a recent student of business,you concur with this advice.

The Uniform Partnership Act is law in every state except Louisiana.

One reason limited liability companies have become so popular is that they:

The income generated by S-Corporations:

The form of business ownership that usually requires the most detailed record keeping is the:

Starting a new business as a sole proprietorship:

Sierra is interested in becoming a franchise owner,by opening and operating one of 50 Cactus Katie's Grills,a very successful fast food chain specializing in food dishes from the American southwest.Which of the following problems is Sierra most likely to encounter if she agrees to become a franchisee?

A significant disadvantage of owning a sole proprietorship is the:

Limited partnerships are just like general partnerships,except that they are partners for a limited time period.

A(n)_________ occurs when one company buys the property and obligations of another company.

"Double taxation" means:

Global franchising is unlikely to experience major growth due to the high costs of operations in global markets.

Nick wants to start his own business.Nick should consider a sole proprietorship if he:

The most popular type of business for franchising is:

The major differences between an S-Corporation and a Limited Liability Company are limits on the number of owners,and,the citizenship status of individuals who are owners.