Exam 4: Selecting a Form of Business Ownership

Sole proprietorship, partnership, and corporation are the three legal forms of business ownership.

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

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

A hostile takeover is a takeover that is resisted by the targeted company's management and its board of directors.

The shareholders elect a ___________, a group of people who are legally responsible for governing the corporation.

Explain and give an example of the concept of unlimited liability in a partnership.

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

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

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

Sole proprietorships account for about 72% of all U.S. businesses.

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

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

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

Which statement is true about partnerships in the United States.

One drawback to incorporation-one that often discourages small businesses from incorporating-is the fact that corporations are costly to set up.

"How much control do you want" is not a major consideration when starting a new business.

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. -The brothers are considering joining a cooperative of tugboat operators. This would allow them to join with other tugboat operators to market their services and purchase supplies such as gasoline. If the cooperative is successful, they would share in the cooperative's financial success.

Corporations account for _____percent of all U.S. businesses but generate almost _____percent of the revenues.

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. -They would most likely form a public corporation.

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. -To maximize the likelihood of obtaining financing from the bank to expand, the three brothers should form a partnership.