Exam 4: Selecting a Form of Business Ownership

Rock City is a community in the Midwest with a population of 23,000 people. Three dental clinics serve the city and the surrounding area. Perfect Smile is owned and operated by the newest dentist in town, Dr. Martin Harris, who employs one dental assistant and a secretary/receptionist. Drs. Joan Bennett and Joseph Young jointly operate Teeth for Life and provide a few more services than Dr. Harris. Rock City Dental Clinic has been in business for 58 years, employs 38 people, and offers a range of services that include dentures, orthodontics, and minor oral surgery. -Teeth for Life would be better suited for a _____ than a sole proprietorship.

In Ben and Jerry's hostile takeover they feared that their _____ would end.

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. -Scuffy the Tugboat could not operate as a sole proprietorship.

When the owner of a sole proprietorship dies, the business by law is allowed to continue to perpetuity.

Profits earned are taxed as personal income and there are no special taxes to pay in the sole proprietorship form of business ownership.

Which industry has the highest percentage of cooperatives

As a general rule it is not feasible to gain new markets or open new distribution channels through mergers and acquisitions.

Choosing the right form of business ownership will give the owner everything he or she desires.

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. -Perhaps the best legal form of organization for Scuffy the Tugboat is a limited liability company (LLC). This would give the three brothers limited liability and would mean they would not pay personal taxes on their company's earnings.

Companies are motivated to merge or acquire other companies for a number of reasons, including gaining complementary products.

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

Liability is a major issue in the formation and type of ownership of a new business enterprise.

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

Under the ____ form of ownership, it's important to have an agreement about conditions for settling disputes.

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 Scuffy the Tugboat operates as a partnership each of its owners would have limited liability.

The S-corporation follows the same tax rules as a sole proprietorship or partnership.

The partnership agreement of the accounting firm of Baines & Sweeney should include conditions for dissolving the partnership.

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

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

If you have the talent to run a business, want to make all important business decisions, and are willing to finance the business with all your own resources, you should consider operating as a partnership.