Exam 5: Forms of Business Ownership

A master limited partnership (MLP)is like a regular limited partnership,except that its shares are not traded.

A common denominator in many partnership disputes is the lack of a written agreement clearly spelling out the roles,rights,and responsibilities of each partner.

An S corporation maintains the advantages of the corporate form of ownership while having the ability to be taxed as a partnership.

Which of the following documents must an entrepreneur file to create a limited liability company?

A special type of limited partnership in which all partners who,in many states must be considered to be professionals,are limited partners.

Acme Corporation is chartered in Delaware,but its primary area of operation is in South Carolin a.In South Carolina,Acme would be considered a(n)________ corporation.

Some forms of ownership are much more costly and involved to create.

As in a limited partnership,owners of a limited liability company who want to maintain their limited liability status cannot actively participate in the management of the company.

Changing from one form of ownership to another once a business is up and running can be difficult,expensive,and complicated.

Profits earned by a partnership are taxed in the same fashion as those earned by a sole proprietorship.

The key to choosing the right form of ownership is:

In a general partnership:

A corporation formed and chartered in Kansas is considered a domestic corporation when doing business in Kansas,and a foreign corporation when doing business in Missouri.

Company founders can become minority stockholders in a corporation but can never lose their final authority or control over business decisions because they are the founders.

The limited liability company,like an S corporation,is a form of ownership that is a cross between a partnership and a corporation.

Although not required by law,a written partnership agreement that spells out the terms of operating the partnership and the status of each partner should be developed.

Should Duke incorporate or should he remain a proprietorship? Why?

The "Das Spelunker" corporation,formed in Germany and conducting business in the U.S.,is considered to be a(n)________ corporation.

John and Bill are considering starting a partnership.Why is it important for them to develop a formal partnership agreement? List at least ten of the provisions their partnership agreement should include.

Carlos founded the "Taco Factory" 20 years ago as a family-oriented restaurant.Over the years as they grew the business,he incorporated and sold stock to outside investors.Recently the stockholders voted to seek liquor licenses and to sell beer and hard liquor in the restaurants.Carlos opposed this,citing the history of the restaurant's "family" environment,but was voted down.Carlos has experienced which drawback of the corporate form of ownership?