Business Structures

When you buy the rights from the parent company and invest in a location approved by the parent company.

• Corporation

• Franchise

• Stock

• Partnership

The main advantage of a Corporation is...

• limiting liability for owners and stockholders.

• giving many owners a say in business decisions

• being inexpensive and easy to establish.

• requiring fewer state and federal regulations

Which can be considered disadvantages of sole proprietorships and partnerships?

• Partnerships require many people to write a charter, while sole proprietorships require one person to write a charter

• Sole proprietorships require one person to know complicated tax laws, while partnerships can have many people who know the rules.

• Partnerships require one person to do many things, while sole proprietorships have other people to weigh in on decisions

• Sole proprietorships require one person to do many things, while partnerships have other people to weigh in on decisions.

What is the most common business organizations in the United States?

• Partnerships

• Sole proprietorships

• Corporations

• Franchises

The following are rights of a Corporation, EXCEPT:

• It can acquire property in the name of the owner

• It can acquire property in its own name

• It is authorized to issue a certain number of stock

• It must file a separate tax return in the name of the corporation

One of the forms of business organization owned by a manager is __________

• Corporation

• Partnership

• Cooperative

• Sole Proprietor

Why might an entrepreneur decide not to take out a franchise agreement, but to establish and independent business?

• The share of the profit has to be paid to the franchiser each year.

• The franchisee gets no choice of supplies or suppliers, and there are strict rules over pricing and layout.

• All is correct.

Which describes the process of how a business incorporates?

• The business must gain government permission and issue a stock sale, followed by a shareholder vote

• The business must issue a stock sale and take a shareholder vote, followed by government permission.

• The business must take a shareholder vote and gain government permission, followed by a stock sale.

• The business may gain government permission, followed by writing a charter to shareholders and issuing a stock sale

The following are disadvantages of a General Partnership, EXCEPT:

• Owner is fully liable for partners actions

• Larger sources of funds

• Limited existence

• Each business partner is granted authority to manage the business on behalf of the other two

What protection does a limited liability offer?

• Protects the company but also allows personal assets to be attached

• Protects you from being personally responsible for business debts or legal judgments against the company

• Provides the same protection as a Corporation

• Protection as long as the business is a partnership