Exam 4: Selecting a Form of Business Ownership

Major advantages of a partnership over a sole proprietorship include having diverse management talent and the ability to sell shares of stock to the public to raise operating funds.

The most common type of business ownership in the United States is the sole proprietorship, which has one owner.

Grainger Company is a major automotive parts manufacturer operating in six countries. It has no restrictions on stock sales and the stock is available to the general public. Grainger Company is a _____ corporation.

_________are earnings distributed to shareholders by a corporation..

Limited liability company (LLC) owners must be U.S. citizens.

In a corporation, all of the owners help run the business.

Ben Cohen and Jerry Greenfield started Ben & Jerry's as a corporation.

SCENARIO-BASED Scuffy the Tugboat is a family-run business that makes tugboats. It is owned by three brothers, Jack, Frank, and Bob. Their first tugboat is still towing ships in Boston Harbor, and over the years, success has allowed them to grow the company by plowing money back into it. Now, however, they want to expand but they are not sure how they should do this. They are also unsure about which legal form of organization is best for them. -If the three brothers form a limited partnership, all three could be limited partners and therefore limit their liability.

Discuss the disadvantages of owning a sole proprietorship.

In a partnership one partner can be sued for unpaid debts incurred by another partner.

If you're asking yourself whether you want to make it easy for the ownership of your new business to change hands, which of the key questions about legal form of ownership are you posing

It is imperative to decide which form of business ownership offers the features that are most important to you.

The board of directors of a corporation sets the company's policies, goals and decisions, and approves the distribution of dividends.

Many people are reluctant to enter into partnerships because of _____.

A partnership is a business that is jointly owned by two or more people.

There are pros and cons for sole proprietorships and partnerships, but not for corporations.

Sole proprietors find it easier to obtain outside financing than do owners of other types of business enterprises.

The Bill and Melinda Gates Foundation is an example of a _____.

The combination of Adidas and Reebok was an example of a(n) _____.

A very important consideration in picking a legal form of business is