Exam 4: Choosing a Form of Business Ownership

Which of the following is a requirement for an S-corporation?

Tiffany graduated from college and needed to decide where she wanted to work.She had several options.Her aunt Martha owned and operated a small business that she started about twenty years ago.Martha,an individual owner of her business,informed Tiffany that she could work for her.On one hand,Tiffany thought it would be a great opportunity to be able to work for her aunt,learn the business,and then run the business when her aunt retires.On the other hand,she also felt that she wanted something a little more challenging;a job where she could really use her education.Her other option would be to work for a company that a friend and her husband had started and jointly owned.It was a rapidly growing company with plenty of opportunity for advancement.However,Tiffany had some reservations about this choice because she was not sure she wanted to work for friends.Her last option was to work for a large retail company,headquartered in Maryland,which had stores across the United States. ​After much consideration,Tiffany decided she didn't want an opportunity and a job because someone knew her.She wanted to prove how motivated and hardworking she was.Once she weighed all the advantages and disadvantages of her different options,she decided to work for the large retail company so that she could gain the most experience for herself. -Refer to Tiffany's Dilemma.Based on the information provided,what type of business does Tiffany's aunt operate?

B&G,Inc. ​A year ago,Carl went to work for B&G,Inc.He has worked for the finance department ever since he started.He noticed that the corporation was only taxed as though it were a partnership.This was something that he found very odd when he first started working for the company,but he later realized it was a fairly common practice.He recognized that this was one of the advantages of this type of corporation. ​While the job was challenging,Carl was not happy.He wanted to work for a company whose main goal was to provide service to the community,not to make a profit.However,Carl felt that,considering his present financial situation,he had to continue working for B&G,Inc.A week later,Carl discovered there was going to be a merger between B&G,Inc.and one of its major competitors.Carl's boss informed him that he would be getting a promotion and a raise.While he was excited about making more money,he still was not happy.He knew then that he would not be working for the company for long. -Refer to B&G,Inc.B&G,Inc.was going through a ____ merger.

Anisa Smith and Danielle Johnson decide to go into business together.They start by writing an agreement listing and explaining the terms of the business they will both own,along with each of their responsibilities.Anisa and Danielle created a(n)

Allied Services is a transportation company that operates in most of the United States.If Allied Services decided to incorporate,in which state would it incorporate?

Before Troy can incorporate his advertising business in Champaign,Illinois,he must have a(n)____ approved by the ____.

When a business incorporates,it receives articles of incorporation from the Internal Revenue Service.

Local residents have always thought the mom-and-pop store on the corner of Locust and Congress was a partnership between Mr.and Mrs.Davis.But Mr.Davis is the real owner.This probably means that the store is a

Corporate officers are

The Smithsonian Institution exists to preserve historical and cultural items of value and to share those items with the public;it does not exist to maximize the wealth of any shareholders.This entity is organized as a(n)

When many banks join together to lend money to developing countries such as Bangladesh and Malaysia,they seek to spread out the risk of default.This is called

Renata and Danuta would like to form a business providing take-out meals to homebound destitute residents of Las Vegas.The meals would be ordered from a menu provided by their company and prepared and delivered by Renata and Danuta.They hope to eventually have their business become international in scope.They will need to raise $100,000 to get their business running and will eventually have much greater capital needs.From the following choices,select the best form of business Renata and Danuta could adopt?

What is the primary disadvantage of both a sole proprietorship and a partnership that a corporation overcomes?

Unless specified in the charter,a corporation has a

Why is a sole proprietorship the most flexible type of business?

A general partner is responsible for any debts of the partnership,regardless of whether he or she was directly involved in the transaction that created the debt.

Most partnerships have ____ partners.

James's partnership agreement with two other men was a bit unsound.One of the problems the men were encountering was uneven productivity among the partners.The agreement required each partner to contribute to every aspect of the business to receive an equal portion of the profits.This agreement did not reflect the idea that

How can the following quotation best be explained: "Stockholders control the activities of a corporation"?

Most stockholders attend a corporation's annual meeting and vote in person.