Exam 6: Forms of Business Ownership

One disadvantage of a sole proprietorship is they usually have limited access to additional financial resources.

Mr.Gonzales wants to help fellow farmers in his community,but he is not interested in making a personal profit.His main goal is to join with other farmers so they can have better bargaining power when purchasing supplies.Which of the following business types will Mr.Gonzales MOST likely form?

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

Jaden and Noel are starting a computer repair business together.Jaden insists on outlining rules for the departure of partners in the partnership agreement,although Noel does not think it is necessary.Which of the following statements might Jaden use to explain his insistence to Noel?

Members are the most important part of a cooperative.

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?

To protect partnerships and minimize misunderstandings among partners,all terms of a partnership should be spelled out in writing.

A disadvantage of corporations is that they generally require extensive paperwork.

Which of the following is the limit of liability of a limited partner?

Which of the following statements BEST describes the distinction between a not-for-profit corporation and a for-profit corporation?

Lucia owns her own dog walking business and has several employees.She filed no legal paperwork and has no partners.Lucia's business is a(n)________.

A small group of businesspeople decide that the best way to do business,while simultaneously protecting their own assets,is to form a corporation.What steps do they need to take in order to successfully establish a corporation?

When establishing a sole proprietorship,it may be necessary to obtain local licensing or permits.

In a large corporation,shareholders responsibilities include ________.

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

The most significant difference between a partnership and a sole proprietor is the ________.

Diane and Julie own a coffee shop.Due to the growing number of customers,they need to hire employees.At the beginning of their partnership it was agreed that Diane would manage human resources.Diane independently interviewed and hired two servers.What makes Diane and Julie's partnership successful in this situation?

Brian establishes a small shoe factory that specializes in custom-made shoes.As a sole proprietor,he is immediately able to set up his business without needing to consult other people to make decisions and establish policies.How would the establishment of policies be different for Brian if he were a board member in a corporation?

Dan is excited to start marketing and selling his new indoor practice hockey tarps and would like to start today.He already has several hockey associations waiting to make purchases.Dan's best option for starting his business quickly and hassle free is a(n)________.

Which of the following statements about S corporations is MOST accurate?