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Business Flashcards

Business Principles – Chapter 5

The failure rate for franchises is lower than other business ventures because of: 1) financial advice and assistance 2) nationally recognized names
In franchise, having management support from the franchisor is a(n) _____ whereas the coattail is effect is considered a ______ advantage, disadvantage
In evaluating the market for a franchise a study must made to determine if your product has a ______ in your territory at the _____ you want to charge market, price
Corporations can rase large amount of money, take advantage of economies o scale and hire experts in all areas of operation. This can be summarized as _____ advantage size
Select all the advantages of the partnership form of business 1) pooled skills2) more financial resources3) longer survival
_____ do not pay taxes when submitting the organization’s tax return to the Internal Revenue Service. partners
Corporations shield their stockholders from unlimited liability and allow them to share in the: profits generated by the firm
Perpetual life for a corporation means that the death of one owner does not _____ the corporation. terminate
This is considered an advantage of corporations ease of transfer of ownership
The paperwork needed to start a corporation is extensive but a corporation must also keep detailed _____ records documenting all financial transactions in detail financial
Double taxation of a corporation occurs because the company pays tax on_____ and then individual shareholders pay income tax on the dividends they receive income
Unlike an LLC, conventional and S corporations’ stockholders can ____ their shares as they wish sell
The ______ of a member can cause LLCs to dissolve automatically death
Franchise are important to the _____ because of the number of new businesses started and jobs created. economy
An entrepreneur would join a _______ if they are uncomfortable starting their business from scratch. franchise
Select the reasons why size is an advantage of the corporation 1) acquire the latest equipment 2) build modern facilities3) diversify through acquisition 4) attract expert for hire
a ____ _____ means that a corporation’s existence will not terminate if one or more owners die perpetual life
Except for states like Delaware and Nevada, _____ creates a disadvantage to incorporating extensive paperwork
When the corporation pays a tax on its profits and individual stockholders each pay tax on dividends distributed by the corporation it is called: double taxation
Although members may choose to reconstitute an LLC after it dissolves, limited ___ ____ is considered a disadvantage of this form of business life span
Which statements are accurate as related to corporate taxation? stockholders pay income tax on the dividends they receive double taxation occurs
Funds available for a sole proprietorship are limited to: what the owner can provide
Some co-ops ask _____ to work for a number of hours a month as a part of their membership duties members
Flexible distribution of profits and losses is considered an advantage of an LLC because: profits/losses do not have to be distributed in proportion to the money each person invests
Select the reasons a business might change ownership form 1) adding a partner to the firm2) seeking limited liability3) dropping a partner from the firm
All of the following are advantages of partnerships except: partnerships have unlimited liabilities for the debts incurred by the business.
___________ of company profits is considered an advantage of a sole proprietorship retention
In a sole proprietorship, any debts or damages incurred by the business are your personal debts and you must pay them. The disadvantage is known as: unlimited liability
A LLC has the choice of taxation and can be taxed as a(n) ____ or as a corporation partnership
Select ways an LLP deals with liability for partners 1) partners are not held liable for each other’s actions 2) when a partner is sued individually for malpractice, it doe snot affect other partners. 3) liability is limited to losing only personal assets directly related to personal acts.
An advantage of cooperatives is that they: increase the economic power of members.
If the owner of a sole proprietorship wants to incorporate, the following disadvantages must be considered: 1) cost of incorporation 2) double taxation
Some people dislike the notion of owners, managers, workers, and buyers being separate individuals with separate goals. To meet their needs, they have formed: cooperatives
Burger King and Gymboree were publicly traded companies until a group of stock holders regained all the firms’ stock in order to regain control. This is referred to as _____ a firm______ taking, private
Limited liability is considered an advantage of forming an LLC because: personal assets are protected.
What are the advantages of the LLC form of organization? 1) flexible ownership rules2) limited liability 3) choice of taxation
A corporation is formally formed with: articles of incorporation and bylaws
A limited liability partnership limits the liability of limited partners to their: initial investment
Being owned by those using the products of a firm rather than simply being a shareholder is what makes a ______ unique cooperative
When analyzing which type of merger a firm uses to grow we can classify them by whether they are: 1) in the same industry2) different industries3) different levels of an industry
Among the questions to ask before franchising internationally is: 1) can you support global partners?2) will you intellectual property be protected?3) are you able to adapt to franchise regulations in other countries?
The limited liability partnership ensure that the limited partner’s _____ assets are not at risk. personal
In addition to the articles of incorporation, a corporation has _____ which describes how the firms is to be operated from both legal and managerial points of view bylaws
______ partners participate in operating the business while limited partners do not general
Franchising has grown very quickly, and many times there is little information on the many new franchises available. Prospective franchisees must concern themselves about _____ franchisors fraudulent
Though start-up costs are higher in international franchising, there is less_____ because thee are not as many other companies in the franchisor’s industries competition
a corporation is formally formed with articles of incorporation and bylaws
The owners of a corporate business are those individuals that own _____ stock
When the actions of other franchises have an impact on your future growth and profitability, this is an example of _____ effects coattail
Sole proprietors have pride of ownership in their business and they deserve all the credit for taking ______ risks
Partners can not only bring money into the business but also _____ which allows the business to borrow additional resources credit
Franchises are expanding internationally to access additional _____ that have new customers and to increase their profit potential markets
The higher costs of starting up an international franchise are usually counterbalanced by an expanding _____ base and less competition consumer
Having more _______ resources is an advantage of partnership so there is more money and credit available to the business financial
The fastest way for a foreign firm to enter the U.S. market may be to _____ to operations of a U.S. company buy

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