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Exam 4: Forms of Business Ownership

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Question 51

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Which of the following statements about limited liability companies (LLCs) is true?

A) LLCs are not corporations.
B) LLCs are like S corporations in that they appeal to small businesses.
C) LLCs offer their owners the option of being taxed as either a partnership or a corporation.
D) LLCs are legal in all states in the U.S.
E) All of the above statements about LLCs are true.

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Question 52

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Marc Wool purchased a franchise from Maaco Collision Repair service.Wool is the _____ in this franchise agreement.

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franchisee...

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Question 53

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What type of business organization generates the most total sales?

Which of the following is a disadvantage for the fast-food franchisee?

Multinational oil companies such as HYPERLINK "http://en.wikipedia.org/wiki/ExxonMobil" \o "ExxonMobil" ExxonMobil, HYPERLINK "http://en.wikipedia.org/wiki/Royal_Dutch_Shell" \o "Royal Dutch Shell" Royal Dutch Shell, or HYPERLINK "http://en.wikipedia.org/wiki/BP" \o "BP" BP are active all the way along the supply chain from locating HYPERLINK "http://en.wikipedia.org/wiki/Crude_oil" \o "Crude oil" crude oil deposits, drilling and extracting crude, transporting it around the world, HYPERLINK "http://en.wikipedia.org/wiki/Refinery" \o "Refinery" refining it into petrochemicals such as HYPERLINK "http://en.wikipedia.org/wiki/Gasoline" \o "Gasoline" gasoline, to distributing the fuel to company-owned retail stations, where it is sold to consumers.To gain this complete control of the various resources needed to product oil and gas, the companies had to have engaged in _____ mergers.

In a sole proprietorship, the owner is fully liable for all business debts of the company.This term is called _____ liability.

International Association of Food Industry Suppliers has completed its _____ merger with the Food Processing Machinery Association.The action represents a coming together of equals in which both boards and staffs are committed to creating a new association that is stronger and better equipped to serve its members' growing needs to more effectively compete in their marketplaces.

Which of the following statements about incorporation is true?

An S corporation is generally set up to:

A _____ is a business that is established, owned, operated, and often financed by one person.

Which of the following is a disadvantage of sole proprietor ownership?

The two types of cooperatives are wholesale and retail.

A type of business entity that provides liability protection but is taxed like a partnership is a:

When Addison Wilcox buys an H&R Block franchise, he becomes a franchisee.

The headquarters, seller, and supplier of the service or method of operation of a franchise is called the:

Why would a company choose to engage in a conglomerate merger instead of a vertical or horizontal merger?

_____ are the owners of a corporation.

What is the first step in incorporating a company?

An _____ is a hybrid entity that is organized like a corporation, with stockholders, board of directors, and officer, but taxed like a partnership with income and losses flowing through to the stockholders and taxed as their personal income.

Tonya Thomas is tired of working for other people.She wants to start her own administrative services businesses and control her own work schedule.She wants to have sole responsibility for all business decisions.Thomas should form a(n) :