Exam 4: Selecting a Form of Business Ownership

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

Maria Martin owns an advertising company. She gets to keep all of the income earned by the business. She operates it as a(n) _____.

CEO, Jack Yates oversees the operations of Johnson Company, a corporation with 1,200 employees. Yates reports to the company's board of directors. Who owns Johnson Company

What advantage(s) does the S-corporation give to the small business owner that the regular corporation does not give to the small business owner

Because it restricts the transferability of its stock, Generation Now is a _____ corporation.

_________are earnings distributed to shareholders by a corporation..

A corporation pays taxes on its earnings. When the earnings are distributed as dividends, the shareholders pay taxes on these dividends. This is called _____.

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

Pat Smith and George Johnson own five flower shops in Manhattan. They want to open a wholesale flower business to supply their shops as well as others in their geographical area. They currently operate as a partnership but are considering changing their legal form of organization. One reason for doing this is to increase the likelihood that they will be able to raise the funds needed to expand. -The corporate form of organization would give them more access to funds but they would still be personally liable for any loans.

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

Who is considered hostile in a hostile takeover

The most important benefit of incorporation is the _____ feature of corporations.

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

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. -If Jerry wanted to bring Terry into the business, and he was concerned about the cost of changing his form of organization, what legal form of organization would he most likely switch to

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

A(n) _____ occurs when two companies join together and form a new company.

A disadvantage of the S-corporation is unlimited liability.

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

Corporations are owned by shareholders who invest money in the business by buying shares of stock.

Which legal form of organization did Ben Cohen and Jerry Greenfield choose when they started their business