Exam 4: Choosing a Form of Business Ownership

Corporations are forbidden by law to enter joint ventures.

What is an owner of a corporation called? What is the difference between a closed corporation and an open 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.What would not be an advantage of Tiffany's aunt's business?

Define "growth from within" in regard to a corporation.Is it generally a suggested path for corporations?

A corporation is perhaps the easiest form of business to organize.

Mars,Inc.,maker of M&Ms and other candy,is 100 percent owned by the Mars family and is therefore referred to as a(n)

A ____ is a merger between firms operating at different but related levels in the production and marketing of a product.

When starting a corporation,people submit articles of incorporation to

With regard to taxation of partnerships,which of the following statements is correct?

To close a sole proprietorship,the owner must

Sears Holding Corporation is incorporated in Delaware,but when it operates in Illinois and Texas,it is considered a(n)____ corporation in those states.

A merger between two firms that make and sell similar products in similar markets is known as a

Downtown Mufflers,a partnership formed by Edmundo and Javier Escobar in California,has been in operation for five years.Edmundo and Javier would like to convert the business to a corporation.They will transfer all of the assets of the partnership to the corporation once it is formed and dissolve the partnership.They are having a difficult time deciding where to incorporate the business.California seems to be the obvious choice because that is where they are located,but Oregon and Nevada are nearby,industrial rental space is inexpensive in Nevada,and the population would supply an adequate number of qualified employees if they chose to move their operation there.Oregon would be a good choice because its damp environment leads to muffler rust which necessitates muffler replacement more often than in California or Nevada.Edmundo mentions that there are other considerations for selecting a state in which to incorporate a business.Which of the following is not a consideration for selecting a forum for incorporating a business?

Common stockholders have the right to elect a corporation's board of directors and vote on corporate matters.

Because there are two or more people in a general partnership,bankers,suppliers,and other creditors are not concerned about unlimited liability.

Phillip and Dwight have been operating a train store together for two years.After a patron slipped on some water on the floor and was injured,they began to think about their personal liability and decided to change the business form to one that would give them the same ability to pass-through profits and shared ownership and control but with little government interference.They would most likely form a

Experts predict that mergers in the first part of the twenty-first century will be the result of cash-rich companies looking to acquire businesses that will enhance their position in the marketplace.

In all states besides the one in which it is incorporated,a business is known as a(n)

Cassandra is about to finish her degree in business management and wants to find a job that will provide her with opportunities to advance within an organization.What type of business organization should Cassandra work for?

Shares of Sandwich Street stock cannot be purchased on any stock exchange or by just any individual.This means that Burger House is a(n)