FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: Business Formation: Choosing the Form That Fits

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Essay

Review LaterAdd Note

Review Later

Identify and describe three disadvantages of general partnerships as a form of business ownership.

Correct Answer

verified

Unlimited liability: All general partner...

View Answer

Show Answer

Question 42

True/False

Review LaterAdd Note

Review Later

A sole proprietorship is a business that is owned, and usually managed, by a single individual.

A) True
B) False

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

Who do the shareholders in a corporation elect to oversee the operation of the company and ensure that their interests are protected?

Which of the following is a legal entity created by permission of a provincial or federal government?

Which term describes the shareholders of a corporation, who have the right to vote on issues affecting the operation of the business?

How does a merger differ from an acquisition? What are the three basic types of mergers, and how do they differ? Identify a reason why firms might pursue each type of merger.

A corporation is a form of business ownership in which the business is considered a legal entity separate and distinct from its owners.

Most sole proprietorships are unable to attract and maintain talented employees.

Liza owns 1000 shares of common stock in Bigbux Inc. As a shareholder in the company, she may vote in the election of Bigbux's board of directors.

Identify and discuss five advantages of operating a business as a sole proprietorship.

Most shareholders in large corporations take an active role in managing their companies.

A key goal of horizontal mergers is to achieve tighter integration of production and increased control over supply of crucial inputs.

Acquisition is a corporate restructuring in which one firm buys another. After the acquisition, the target firm ceases to exist as an independent entity, while the acquiring firm continues to operate.

Franchisors seldom succeed in their attempts to move into foreign markets.

Limited liability partnerships (LLP) are generally available only to professional groups, such as accountants, architects, doctors, and lawyers.

Which of the following is an advantage of a corporation as a form of business ownership?

A merger is a corporate restructuring that occurs when one firm, called the acquiring firm, buys another firm, called the target firm.

What type of liability do sole proprietors have for the debts of their companies?

Ralph Florez owns and operates his own business as a sole proprietor. Recently his company was sued. The fact that Ralph has organized his business as a sole proprietorship means that Ralph is protected against any financial loss if the company loses the lawsuit.

In terms of total revenue by form of ownership, the sole proprietorship is the largest form of business ownership; partnerships follow, with corporations being the smallest form.