Deck 4: Choosing a Form of Business Ownership

Question 1

The Conglomerate Success of Berkshire Hathaway
When Warren Buffett started his first partnership more than 50 years ago, he never dreamed he would wind up putting together a wildly diverse collection of businesses under one corporate umbrella. Originally, Buffett set up a series of partnerships with family and friends to pool cash for buying big blocks of stock in companies he had researched. Not all of Buffett's stock picks paid off, but many were so successful that Buffett quickly earned a worldwide reputation for savvy investing.
Always looking for a good investment, Buffett turned his attention to the prospects of Berkshire Hathaway, a struggling textile manufacturer based in New Bedford, Massachusetts. Seeing value in the company's heritage and its plans for making synthetic fibers, Buffett began buying its stock. Once he controlled the mills, Buffett put one of Berkshire Hathaway's executives in charge. This was Buffett's pattern over and over as he built a conglomerate by adding to his company's portfolio of businesses. He provided the financial backing, but he didn't meddle in the day-to-day management decisions of the corporations he purchased.
Berkshire Hathaway became the corporate vehicle through which Buffett acquired a variety of companies. In the early days, he pursued insurance firms, banks, and publishing companies. He continued buying year after year, adding See's Candies to his conglomerate and, later, GEICO insurance, sticking to his tried-and-true formula of investing in companies with long-term profit potential and strong competitive positions.
Living in Omaha, Buffett couldn't help but notice the success of the Nebraska Furniture Mart, a superstore that annually sold $100 million worth of furniture. The family-owned business was a fierce competitor and a major regional power in furniture retailing. Although Buffett had tried, unsuccessfully, to buy the store, he never gave up. During the 1980s, he again approached the retailer. This time he pointed out all the financial benefits of being part of Berkshire Hathaway and emphasized his hands-off approach to ownership. Berkshire Hathaway won the deal.
Today Berkshire Hathaway has more than six dozen companies in its diverse portfolio. Although it still owns some of the companies it acquired decades ago, the portfolio has changed a bit over the years. GEICO, the third-largest U.S. auto insurance firm, has been a member of the conglomerate since 1996. Berkshire Hathaway also owns the General Re insurance firm. Among the retailing businesses it owns are Jordan Furniture, Star Furniture, Helzberg Diamond Shops, and the Pampered Chef direct-seller of kitchen tools. In addition, it owns the ice-cream franchising company Dairy Queen; Benjamin Moore paint; Johns Manville building products; and Shaw Industries, which makes tufted broadloom carpeting.
Berkshire Hathaway has expanded into transportation, as well. Its NetJets was a pioneer in offering companies and individuals the opportunity to own a fraction of a private jet, so they can enjoy the convenience of flying whenever and wherever they want. In 2009, the conglomerate paid $26 billion for Burlington Northern Santa Fe Corp., a railroad that serves western and southwestern states. This acquisition, labeled "brilliant" by a railway competitor because it was completed just as the industry began to rebound from recession, gave Buffett access to years of details about the size, volume, and destination of train shipments. By analyzing this information, Buffett spotted clues that helped him fine-tune his investments.
The annual meeting held by Berkshire Hathaway is unlike any stockholder gathering on Earth. The more-than-35,000 people in attendance spend hours browsing and buying from exhibits set up by the conglomerate's companies. Stockholders are encouraged to bring the details of their car insurance and let GEICO give them quotes on the spot, including a small ownership discount. Nebraska Furniture Mart promotes a special stockholders' weekend of sales, as do other Berkshire Hathaway-owned retailers in the area. The annual meeting is such a high-profile event that it merits coverage by the New York Times, CNBC, and Fortune magazine, among many other major media outlets. What will Berkshire Hathaway's next acquisition target be? 19
Why would Berkshire Hathaway own a number of furniture retailers? Outline the possible advantages and disadvantages.

Answer 1

Berkshire Hathaway Inc. is a holding company owning subsidiaries involved in a number of diversified business activities.
As a part of its diversified strategy the group has acquired the following furniture retailers: Nebraska Furniture Mart, R.C. Willey, Star Furniture and Jordan's.
The group gains the advantage by earning huge margins generated by the aggressive furniture retailing business.
Since the furniture business is part of a greater conglomerate, due attention required to expand it might not be feasible.
These furniture shops operate in their own brand names and might not have the advantage of being recognized as part of Berkshire Hathaway Inc.

Question 2

If you were to start a business, which ownership form would you choose? What factors might affect your choice?

Answer 2

If one were to start a business, one would start a sole proprietorship form of business, as it is the most favorable form of business in the present day situation.
The factors that affect an entrepreneur's decision to open such a business include its ease of opening and closure on the basis of his/her needs and capital. It also brings with it a sense of ownership, pride and ultimate power for decision making. It also makes one feel good as one gets to keep their hard earned money. The entrepreneur gets paid off for his/her work and no one else can take the credit for it. He/she also has a better control and the entrepreneur's own idea and plans are used. Even the government has a more favorable stance towards the sole proprietorship form of business, which enjoys minimal tax liability. A small business owner has to pay taxes from his/her personal income which also simplifies calculations.

Question 3

What is a sole proprietorship? What are the major advantages and disadvantages of this form of business ownership?

Answer 3

In sole proprietorship the business is owned and operated by one person. Majority of sole proprietorship operate as small organizations with a few companies that are large. Sole proprietorship is easiest to start and is the simplest form of business ownership.
Advantages :
a. Ease of Start-Up and Closure
b. Pride of ownership
c. Retention of all profits
d. No special taxes
e. Flexibility of being your own boss
Disadvantages:
a. Unlimited liability
b. Lack of continuity
c. Lack of money
d. Limited management skill
e. Difficulty in hiring employees

Question 4

Annie's Homegrown: A Corporation with Entrepreneurial Spirit
When Annie Withey's first husband suggested she create a snack food to go into the resalable bag he'd invented, the 21-year-old newlywed developed an all-natural, cheddar cheese-flavored popcorn. The bag never made it to market, but Annie's popcorn, called Smartfood, became one of the fastest-selling snack foods in U.S. history. In fact, in 1989 PepsiCo Inc's Frito-Lay division bought the brand for about $15 million.
Annie, an organic farmer and mother of two children, cashed out stock worth $1 million and created the all-natural white-cheddar macaroni and cheese product she had been thinking about for some time. She and her husband initially marketed it by knocking on supermarket doors and canvassing ski lodges, outdoor folk concerts, store parking lots, and wherever people gathered. Thus Annie's Homegrown, a pioneering entrepreneurial company in the natural and organic food industry, was born.
This venture was also a success for Annie, and even though her firm has gone on to become part of a larger conglomerate, Annie remains the entrepreneurial heart of the brand. "I learned a lot and took a lot with me," says Annie of her early experience running the operation. Now she delegates day-to-day management, as well as public appearances, to others, and concentrates on what she does best-creating new recipes and providing inspiration to her co-workers. Being a public figure? "That's just not me," she says. "I'm not very good at making presentations and selling," she feels.
Annie's Homegrown offers 80 natural and organic pasta and canned products, as well as snack crackers and a microwaveable version of its now-famous macaroni and cheese, designed for college dorm room convenience. Its products are found in Costco and Target, as well as in 18,000 grocery and 6,000 natural food stores nationwide. Yet Annie's still has only about 3 percent of the macaroni and cheese market compared with the leader, Kraft, which has 80 percent.
"We could never compete directly," says CEO John Foraker. 'We appeal to a consumer who is less price conscious and willing to pay more to feel good about what they eat." Because Annie's mac and cheese also costs 30 percent more than Kraft's, the company's marketing focuses on product attributes. The nation's leading brand of organic and natural pasta meals and snacks, Annie's Homegrown represents what Customer Relationship Magazine calls "an unmistakable shift toward organic products, green marketing, and sustainability efforts." Annie's story, well known to many of the company's customers, also helps build loyalty to the company's brands.
But for Annie Withey, becoming successful meant taking some risks. Annie had to personally guarantee all loans to her company early on. "Your entire career and reputation are on the line," says company president Paul Nardone. But Annie has always trusted her instincts, and events have usually proven her right. She is "our moral compass," says Nardone, and a continuing inspiration. By 1998 a capital infusion from two small food companies, Consorzio and Fantastic Foods, was helping fuel growth, but choosing the right investment company would become critical to the company's long-term expansion goals.
CEO Foraker says Solera Capital LLC, a $250 million private-equity firm run by women, was looking to enter the fast-growing organic food market and took a majority stake in the company with an initial $20 million investment in 2002. "It's a perfect fit," says Molly Ashby, Solera's chief executive officer. It's a great brand, very authentic, with tremendous crossover into both mainstream and natural markets. The remaining interest in the company is held by Withey, current management, and a small group of founding investors. Solera recently bought Consorzio and Fantastic Foods and combined them with Annie's Homegrown to form Homegrown Naturals Inc., based in Napa, California.
As founder, Annie Withey has assumed the role of "inspirational president." She still writes the text on every product box, and Bernie the Bunny, inspired by her brother's illustration, still appears on every package. As she continues to fill the role of creative leader of the company she started, Annie has been described as its "quality gatekeeper" and a humble person whose creative instincts are "right on." When customers write or e-mail to suggest new products, each idea is still considered, and the "real" Annie never gets tired of hearing how much people enjoy her products. 18
What personal traits does Annie Withey exhibit that entrepreneurs need to succeed? How have her personal characteristics helped shape the success of her business?

Question 5

The Conglomerate Success of Berkshire Hathaway
When Warren Buffett started his first partnership more than 50 years ago, he never dreamed he would wind up putting together a wildly diverse collection of businesses under one corporate umbrella. Originally, Buffett set up a series of partnerships with family and friends to pool cash for buying big blocks of stock in companies he had researched. Not all of Buffett's stock picks paid off, but many were so successful that Buffett quickly earned a worldwide reputation for savvy investing.
Always looking for a good investment, Buffett turned his attention to the prospects of Berkshire Hathaway, a struggling textile manufacturer based in New Bedford, Massachusetts. Seeing value in the company's heritage and its plans for making synthetic fibers, Buffett began buying its stock. Once he controlled the mills, Buffett put one of Berkshire Hathaway's executives in charge. This was Buffett's pattern over and over as he built a conglomerate by adding to his company's portfolio of businesses. He provided the financial backing, but he didn't meddle in the day-to-day management decisions of the corporations he purchased.
Berkshire Hathaway became the corporate vehicle through which Buffett acquired a variety of companies. In the early days, he pursued insurance firms, banks, and publishing companies. He continued buying year after year, adding See's Candies to his conglomerate and, later, GEICO insurance, sticking to his tried-and-true formula of investing in companies with long-term profit potential and strong competitive positions.
Living in Omaha, Buffett couldn't help but notice the success of the Nebraska Furniture Mart, a superstore that annually sold $100 million worth of furniture. The family-owned business was a fierce competitor and a major regional power in furniture retailing. Although Buffett had tried, unsuccessfully, to buy the store, he never gave up. During the 1980s, he again approached the retailer. This time he pointed out all the financial benefits of being part of Berkshire Hathaway and emphasized his hands-off approach to ownership. Berkshire Hathaway won the deal.
Today Berkshire Hathaway has more than six dozen companies in its diverse portfolio. Although it still owns some of the companies it acquired decades ago, the portfolio has changed a bit over the years. GEICO, the third-largest U.S. auto insurance firm, has been a member of the conglomerate since 1996. Berkshire Hathaway also owns the General Re insurance firm. Among the retailing businesses it owns are Jordan Furniture, Star Furniture, Helzberg Diamond Shops, and the Pampered Chef direct-seller of kitchen tools. In addition, it owns the ice-cream franchising company Dairy Queen; Benjamin Moore paint; Johns Manville building products; and Shaw Industries, which makes tufted broadloom carpeting.
Berkshire Hathaway has expanded into transportation, as well. Its NetJets was a pioneer in offering companies and individuals the opportunity to own a fraction of a private jet, so they can enjoy the convenience of flying whenever and wherever they want. In 2009, the conglomerate paid $26 billion for Burlington Northern Santa Fe Corp., a railroad that serves western and southwestern states. This acquisition, labeled "brilliant" by a railway competitor because it was completed just as the industry began to rebound from recession, gave Buffett access to years of details about the size, volume, and destination of train shipments. By analyzing this information, Buffett spotted clues that helped him fine-tune his investments.
The annual meeting held by Berkshire Hathaway is unlike any stockholder gathering on Earth. The more-than-35,000 people in attendance spend hours browsing and buying from exhibits set up by the conglomerate's companies. Stockholders are encouraged to bring the details of their car insurance and let GEICO give them quotes on the spot, including a small ownership discount. Nebraska Furniture Mart promotes a special stockholders' weekend of sales, as do other Berkshire Hathaway-owned retailers in the area. The annual meeting is such a high-profile event that it merits coverage by the New York Times, CNBC, and Fortune magazine, among many other major media outlets. What will Berkshire Hathaway's next acquisition target be? 19
Do you think Berkshire Hathaway should allow stockholders to suggest or vote on potential acquisitions via proxy or at the annual meeting? Why or why not?

Question 6

Why might an investor choose to become a partner in a limited-liability partnership (LLP) business instead of purchasing the stock of an open corporation?

Question 7

How does a partnership differ from a sole proprietorship? Which disadvantages of sole proprietorship does the partnership tend to eliminate or reduce?

Question 8

Annie's Homegrown: A Corporation with Entrepreneurial Spirit
When Annie Withey's first husband suggested she create a snack food to go into the resalable bag he'd invented, the 21-year-old newlywed developed an all-natural, cheddar cheese-flavored popcorn. The bag never made it to market, but Annie's popcorn, called Smartfood, became one of the fastest-selling snack foods in U.S. history. In fact, in 1989 PepsiCo Inc's Frito-Lay division bought the brand for about $15 million.
Annie, an organic farmer and mother of two children, cashed out stock worth $1 million and created the all-natural white-cheddar macaroni and cheese product she had been thinking about for some time. She and her husband initially marketed it by knocking on supermarket doors and canvassing ski lodges, outdoor folk concerts, store parking lots, and wherever people gathered. Thus Annie's Homegrown, a pioneering entrepreneurial company in the natural and organic food industry, was born.
This venture was also a success for Annie, and even though her firm has gone on to become part of a larger conglomerate, Annie remains the entrepreneurial heart of the brand. "I learned a lot and took a lot with me," says Annie of her early experience running the operation. Now she delegates day-to-day management, as well as public appearances, to others, and concentrates on what she does best-creating new recipes and providing inspiration to her co-workers. Being a public figure? "That's just not me," she says. "I'm not very good at making presentations and selling," she feels.
Annie's Homegrown offers 80 natural and organic pasta and canned products, as well as snack crackers and a microwaveable version of its now-famous macaroni and cheese, designed for college dorm room convenience. Its products are found in Costco and Target, as well as in 18,000 grocery and 6,000 natural food stores nationwide. Yet Annie's still has only about 3 percent of the macaroni and cheese market compared with the leader, Kraft, which has 80 percent.
"We could never compete directly," says CEO John Foraker. 'We appeal to a consumer who is less price conscious and willing to pay more to feel good about what they eat." Because Annie's mac and cheese also costs 30 percent more than Kraft's, the company's marketing focuses on product attributes. The nation's leading brand of organic and natural pasta meals and snacks, Annie's Homegrown represents what Customer Relationship Magazine calls "an unmistakable shift toward organic products, green marketing, and sustainability efforts." Annie's story, well known to many of the company's customers, also helps build loyalty to the company's brands.
But for Annie Withey, becoming successful meant taking some risks. Annie had to personally guarantee all loans to her company early on. "Your entire career and reputation are on the line," says company president Paul Nardone. But Annie has always trusted her instincts, and events have usually proven her right. She is "our moral compass," says Nardone, and a continuing inspiration. By 1998 a capital infusion from two small food companies, Consorzio and Fantastic Foods, was helping fuel growth, but choosing the right investment company would become critical to the company's long-term expansion goals.
CEO Foraker says Solera Capital LLC, a $250 million private-equity firm run by women, was looking to enter the fast-growing organic food market and took a majority stake in the company with an initial $20 million investment in 2002. "It's a perfect fit," says Molly Ashby, Solera's chief executive officer. It's a great brand, very authentic, with tremendous crossover into both mainstream and natural markets. The remaining interest in the company is held by Withey, current management, and a small group of founding investors. Solera recently bought Consorzio and Fantastic Foods and combined them with Annie's Homegrown to form Homegrown Naturals Inc., based in Napa, California.
As founder, Annie Withey has assumed the role of "inspirational president." She still writes the text on every product box, and Bernie the Bunny, inspired by her brother's illustration, still appears on every package. As she continues to fill the role of creative leader of the company she started, Annie has been described as its "quality gatekeeper" and a humble person whose creative instincts are "right on." When customers write or e-mail to suggest new products, each idea is still considered, and the "real" Annie never gets tired of hearing how much people enjoy her products. 18
How did the company evolve from a small business into a multimillion dollar leader in the natural organic food industry? What long-term growth strategies is the company pursuing as it moves into the future?

Question 9

The Conglomerate Success of Berkshire Hathaway
When Warren Buffett started his first partnership more than 50 years ago, he never dreamed he would wind up putting together a wildly diverse collection of businesses under one corporate umbrella. Originally, Buffett set up a series of partnerships with family and friends to pool cash for buying big blocks of stock in companies he had researched. Not all of Buffett's stock picks paid off, but many were so successful that Buffett quickly earned a worldwide reputation for savvy investing.
Always looking for a good investment, Buffett turned his attention to the prospects of Berkshire Hathaway, a struggling textile manufacturer based in New Bedford, Massachusetts. Seeing value in the company's heritage and its plans for making synthetic fibers, Buffett began buying its stock. Once he controlled the mills, Buffett put one of Berkshire Hathaway's executives in charge. This was Buffett's pattern over and over as he built a conglomerate by adding to his company's portfolio of businesses. He provided the financial backing, but he didn't meddle in the day-to-day management decisions of the corporations he purchased.
Berkshire Hathaway became the corporate vehicle through which Buffett acquired a variety of companies. In the early days, he pursued insurance firms, banks, and publishing companies. He continued buying year after year, adding See's Candies to his conglomerate and, later, GEICO insurance, sticking to his tried-and-true formula of investing in companies with long-term profit potential and strong competitive positions.
Living in Omaha, Buffett couldn't help but notice the success of the Nebraska Furniture Mart, a superstore that annually sold $100 million worth of furniture. The family-owned business was a fierce competitor and a major regional power in furniture retailing. Although Buffett had tried, unsuccessfully, to buy the store, he never gave up. During the 1980s, he again approached the retailer. This time he pointed out all the financial benefits of being part of Berkshire Hathaway and emphasized his hands-off approach to ownership. Berkshire Hathaway won the deal.
Today Berkshire Hathaway has more than six dozen companies in its diverse portfolio. Although it still owns some of the companies it acquired decades ago, the portfolio has changed a bit over the years. GEICO, the third-largest U.S. auto insurance firm, has been a member of the conglomerate since 1996. Berkshire Hathaway also owns the General Re insurance firm. Among the retailing businesses it owns are Jordan Furniture, Star Furniture, Helzberg Diamond Shops, and the Pampered Chef direct-seller of kitchen tools. In addition, it owns the ice-cream franchising company Dairy Queen; Benjamin Moore paint; Johns Manville building products; and Shaw Industries, which makes tufted broadloom carpeting.
Berkshire Hathaway has expanded into transportation, as well. Its NetJets was a pioneer in offering companies and individuals the opportunity to own a fraction of a private jet, so they can enjoy the convenience of flying whenever and wherever they want. In 2009, the conglomerate paid $26 billion for Burlington Northern Santa Fe Corp., a railroad that serves western and southwestern states. This acquisition, labeled "brilliant" by a railway competitor because it was completed just as the industry began to rebound from recession, gave Buffett access to years of details about the size, volume, and destination of train shipments. By analyzing this information, Buffett spotted clues that helped him fine-tune his investments.
The annual meeting held by Berkshire Hathaway is unlike any stockholder gathering on Earth. The more-than-35,000 people in attendance spend hours browsing and buying from exhibits set up by the conglomerate's companies. Stockholders are encouraged to bring the details of their car insurance and let GEICO give them quotes on the spot, including a small ownership discount. Nebraska Furniture Mart promotes a special stockholders' weekend of sales, as do other Berkshire Hathaway-owned retailers in the area. The annual meeting is such a high-profile event that it merits coverage by the New York Times, CNBC, and Fortune magazine, among many other major media outlets. What will Berkshire Hathaway's next acquisition target be? 19
How much influence are Berkshire Hathaway's stockholders likely to have (or want) over the management of the conglomerate or one of the conglomerate's companies? Explain.

Question 10

Discuss the following statement: "Corporations are not really run by their owners."

Question 11

What is the difference between a general partner and a limited partner?

Question 12

Annie's Homegrown: A Corporation with Entrepreneurial Spirit
When Annie Withey's first husband suggested she create a snack food to go into the resalable bag he'd invented, the 21-year-old newlywed developed an all-natural, cheddar cheese-flavored popcorn. The bag never made it to market, but Annie's popcorn, called Smartfood, became one of the fastest-selling snack foods in U.S. history. In fact, in 1989 PepsiCo Inc's Frito-Lay division bought the brand for about $15 million.
Annie, an organic farmer and mother of two children, cashed out stock worth $1 million and created the all-natural white-cheddar macaroni and cheese product she had been thinking about for some time. She and her husband initially marketed it by knocking on supermarket doors and canvassing ski lodges, outdoor folk concerts, store parking lots, and wherever people gathered. Thus Annie's Homegrown, a pioneering entrepreneurial company in the natural and organic food industry, was born.
This venture was also a success for Annie, and even though her firm has gone on to become part of a larger conglomerate, Annie remains the entrepreneurial heart of the brand. "I learned a lot and took a lot with me," says Annie of her early experience running the operation. Now she delegates day-to-day management, as well as public appearances, to others, and concentrates on what she does best-creating new recipes and providing inspiration to her co-workers. Being a public figure? "That's just not me," she says. "I'm not very good at making presentations and selling," she feels.
Annie's Homegrown offers 80 natural and organic pasta and canned products, as well as snack crackers and a microwaveable version of its now-famous macaroni and cheese, designed for college dorm room convenience. Its products are found in Costco and Target, as well as in 18,000 grocery and 6,000 natural food stores nationwide. Yet Annie's still has only about 3 percent of the macaroni and cheese market compared with the leader, Kraft, which has 80 percent.
"We could never compete directly," says CEO John Foraker. 'We appeal to a consumer who is less price conscious and willing to pay more to feel good about what they eat." Because Annie's mac and cheese also costs 30 percent more than Kraft's, the company's marketing focuses on product attributes. The nation's leading brand of organic and natural pasta meals and snacks, Annie's Homegrown represents what Customer Relationship Magazine calls "an unmistakable shift toward organic products, green marketing, and sustainability efforts." Annie's story, well known to many of the company's customers, also helps build loyalty to the company's brands.
But for Annie Withey, becoming successful meant taking some risks. Annie had to personally guarantee all loans to her company early on. "Your entire career and reputation are on the line," says company president Paul Nardone. But Annie has always trusted her instincts, and events have usually proven her right. She is "our moral compass," says Nardone, and a continuing inspiration. By 1998 a capital infusion from two small food companies, Consorzio and Fantastic Foods, was helping fuel growth, but choosing the right investment company would become critical to the company's long-term expansion goals.
CEO Foraker says Solera Capital LLC, a $250 million private-equity firm run by women, was looking to enter the fast-growing organic food market and took a majority stake in the company with an initial $20 million investment in 2002. "It's a perfect fit," says Molly Ashby, Solera's chief executive officer. It's a great brand, very authentic, with tremendous crossover into both mainstream and natural markets. The remaining interest in the company is held by Withey, current management, and a small group of founding investors. Solera recently bought Consorzio and Fantastic Foods and combined them with Annie's Homegrown to form Homegrown Naturals Inc., based in Napa, California.
As founder, Annie Withey has assumed the role of "inspirational president." She still writes the text on every product box, and Bernie the Bunny, inspired by her brother's illustration, still appears on every package. As she continues to fill the role of creative leader of the company she started, Annie has been described as its "quality gatekeeper" and a humble person whose creative instincts are "right on." When customers write or e-mail to suggest new products, each idea is still considered, and the "real" Annie never gets tired of hearing how much people enjoy her products. 18
Explore Annie's Web site at http://www.annies.com. What unique features did you find? How does this Web site support Annie's mission?

Question 13

What kinds of services do not-for-profit corporations provide? Would a career in a not-for-profit corporation appeal to you?

Question 14

What issues should be included in a partnership agreement? Why?

Question 15

Is growth a good thing for all firms? How does management know when a firm is ready to grow?

Question 16

Explain the difference between
a. an open corporation and a closed corporation.
b. a domestic corporation, a foreign corporation, and an alien corporation.

Question 17

Outline the incorporation process, and describe the basic corporate structure.

Question 18

What rights do stockholders have?

Question 19

What are the primary duties of a corporation's board of directors? How are directors selected?

Question 20

What are the major advantages and disadvantages associated with the corporate form of business ownership?

Question 21

How do an S-corporation and a limited-liability company differ?

Question 22

Explain the difference between a regular corporation and a not-for-profit corporation.

Question 23

Why are cooperatives formed? Explain how they operate.

Question 24

In what ways are joint ventures and syndicates alike? In what ways do they differ?

Question 25

What is a hostile takeover? How is it related to a tender offer and a proxy fight?

Question 26

Describe the three types of mergers.