Exam 6: Forms of Business Ownership and Buying an Existing Business

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.

The due diligence process of analyzing and evaluating an existing business ________.

Of all U.S. business firms, sole proprietorships are the most common, accounting for approximately 71 percent of businesses.

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

A partnership agreement defines how the partners will be compensated. Normally, ________.

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.

If a sole proprietorship fails, the owner is not liable for its debts since the business is a separate legal entity.

When evaluating a business as a potential candidate for purchase, an entrepreneur should determine the real reason the current owner wants to sell.

Briefly discuss the seven steps in acquiring a business.

Which of the following is not an advantage of the corporate form of ownership?

Perhaps the ideal source of financing the purchase of an existing business is ________.

If a limited partner withdraws, sells his ownership in the partnership, or dies, the partnership is not forced into dissolution.

In a partnership, the ________ partner(s) has (have) unlimited liability for the partnership's debts.

A special type of partnership in which all partners, who in many states must be professionals, are limited partners is called ________.

Probably the most important reason to have a partnership agreement is that ________.

In the ________ form of ownership, the business itself pays income taxes.

Which of the following is not true of a limited liability partnership?

The average cost to create a legal business entity is ________.

What factors should an entrepreneur consider when choosing a form of ownership?

When done correctly, the due diligence process will ________.