Exam 4: Selecting a Form of Business Ownership

A major problem with partnerships is limited liability. Each partner is personally liable for his or her own actions, but not for the actions of all the partners.

A major reason many people choose not to incorporate is because of the costs involved and double taxes that must be paid.

What is a sole proprietorship

A disadvantage of the S-corporation is unlimited liability.

The sole proprietor supplies all the different talents needed to make the business a success.

SCENARIO-BASED Jerry Foster is a sole proprietorship who owns a canoe renting business. Jerry’s employee, Terry Gibbs, greets customers at the company’s office, loads the customers and their rented canoes onto a van, provides them with safety instructions and drives them upstream. Once unloaded the canoers are on their own to float back to the company’s office to check in. Although there have been minor accidents, no one has drowned in the nine years the business has been in operation. Jerry plans to add kayaks and rubber rafts next year. The scenery is beautiful and each day people see wild animals come down to the water. -What benefit will Jerry enjoy over the years as the sole owner of his canoe renting company

The purchase of one company by another with no new company being formed is called a(n) _____.

A partnership agreement specifies each owner's rights and responsibilities in the business.

If you want to own the business yourself, you might consider setting up as a(n)__________

If George Johnson died, the company would cease to exist.

A corporation is a legal entity that is entirely separate from the parties that own it.

As a sole proprietor, your personal assets are not at risk for the sake of the business.

United Airlines and Continental Airlines were an example of a(n) _____.

Compare and contrast mergers and acquisitions.

No single form of ownership will give you everything you want and you will have to accept some tradeoffs.

A _____ is a business owned and operated jointly by two or more people.

Which of these statements is true in regard to the sole proprietorship form of business

How did Ben Cohen and Jerry Greenfield start one of the best-known ice cream companies in the country

Which of the following is not an advantage of a partnership (relative to a sole proprietorship)

As attorneys who share equal ownership, profits, and losses in their firm, Raymond James and Alexander Doss have opted for which legal form of business ownership