Exam 5: Forms of Business Ownership

Which of the following statements about the partnership as a form of business ownership is MOST accurate?

____________________ are the owners of a corporation.

The development of new drugs is very expensive.For this reason Genentech,a large biotechnical company,has entered into a business arrangement with Swiss-owned Roche to develop a vaccine for tuberculosis.When the vaccine is developed or when the two biotechnical companies determine the vaccine cannot be developed using their current methodology,this relationship will dissolve.What type of relationship is it?

Which of the following is a disadvantage of sole proprietor ownership?

Corporations face fewer government restrictions and regulations than sole proprietorships and partnerships.

A merger between Abrasive Engineering and Hans Weber,both manufacturers of sanding machines used in the manufacture of fine furniture,would be considered a ____________________ merger.

What is a disadvantage of franchising to the franchisee?

Buying a franchise is not as important a growth strategy today as it was in the 1960s.

The sole proprietorship is considered a legal entity; therefore,it is taxed separately from the owner.

Discuss the following statement: "The franchisee has just as much control over his or her business as the sole proprietor."

Leveraged buyouts (LBO)are inefficient and do not generate enough cash to service the debt that was created by the merger.

In 1984,Suzanne Pogell wanted to learn to sail,but she could find no one to teach her.She finally did convince someone to teach her to sail and,after mastering sailing,she started an all-woman sailing school called Womanship as a sole proprietorship.When she dies,which of the following will occur?

Mergers create an advantage when competing in the global marketplace.

Who owns a corporation?

Faye Adkins had a relish that her family and friends raved about.As a result of moral and financial support from her family,Adkins began her own business and sells it in local supermarkets and on the Internet.Faye Adkins is an example of which of the following?

Which form of business ownership is easiest to dissolve?

If Alonzo Bajalia were to become a limited partner in a landscaping company,which of the following would occur?

Aaron Medford has invested $600 in the corporate stock of a manufacturer of offshore oil drilling equipment.If the company goes bankrupt,what is the most Medford could lose?

Dissolving a partnership is easier than dissolving a sole proprietorship.

The corporation's board of directors elects the corporate officers.