Exam 4: Choosing a Form of Business Ownership

Susan has a commercial laundry service that has been growing rapidly. She wants to continue to grow the business, but she needs access to more money and does not want to risk her personal assets. Susan contacts her lawyer to see if all the legal requirements are met to start the process of

To close a sole proprietorship, the owner must

A corporation chartered in Kansas and doing business in Kansas is known as a domestic corporation.

Unlike a person, a corporation exists only on paper.

​Maurice has been operating his business as a sole proprietorship but decides that it is too much work for him to do alone. He does not want to file a lot of government forms, but would like to bring in someone to own and operate it with him. Maurice needs a

A general partner is responsible for any debts of the partnership, regardless of whether he or she was directly involved in the transaction that created the debt.

​At one time, AT&T and T-Mobile wanted to merge but were prevented from doing so by the Justice Department. The government maintained that to permit the merger would eliminate choices for the consumers because these companies represented the majority of the cell phone service industry. What is the name given to this kind of merger?

Karen Howard loves to cook and receives unqualified praise whenever she prepares a meal for someone. Encouraged by these compliments and eager to put her culinary talents to good use, Karen decides to open a small neighborhood restaurant. Since she plans to maintain complete control of the business, she will most likely organize it as a

A banker or lender is more likely to make sizable loans to a sole proprietor than to a partnership.

With respect to combined business skills and knowledge, which of the following partnerships is best?

Laura wants to start a business, but she is unsure of the legal form best for her. Short of cash, she has decided to take the form that is the least expensive and most flexible in terms of decision making and implementation. Which would you recommend?

Most stockholders attend a corporation's annual meeting and vote in person.

Profits of a large corporation are taxed twice, once as corporate income and again as personal income of stockholders.

With regard to limited-liability companies, which of the following statements is false?

How might a sole proprietorship have a possible tax advantage?

What is a not-for-profit corporation? Discuss some of the similarities between not-for-profit corporations and for-profit corporations.

Genetech, a biotechnology firm engaging in the new field of genetic engineering, has asked your advice about remaining independent and temporarily gaining access to the marketing and manufacturing expertise it lacks from another firm. You would suggest

What are some of the disadvantages of partnerships? Are the disadvantages enough to dissuade you from forming this type of business ownership?

A voluntary association of two or more people acting as co-owners of a business is known as a partnership.

Legally, a partnership must