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Exam 4: Choosing a Form of Business Ownership

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Question 81

Multiple Choice

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If Avon and Merck joined together to produce a cream that slows down the aging process, this would be called a(n) _____.

A) cooperative
B) joint venture
C) combined corporation
D) S-corporation
E) partnership

F) B) and C)
G) A) and B)

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Question 82

Multiple Choice

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Walters Company, LLC, is a wholesale distributor of industrial packaging.A primary advantage that Walters enjoys as an LLC that corporations do not have is

A) ease of formation.
B) limited liability.
C) avoiding double taxation.
D) one class of outstanding stock.
E) income taxes.

F) B) and E)
G) A) and E)

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Question 83

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If the owner of a sole proprietorship retires or dies, the owner's heirs may take over a profitable business and either sell it or continue to operate it.

To close a sole proprietorship, the owner must

Shareholders of an S-corporation are taxed as if they were owners in a partnership.

Joint ventures are created for a specific purpose and dissolved when that purpose is achieved.

The form of business organization that comprises about 19 percent of all businesses in the United States is the _____.

A corporation whose stock can be purchased by anyone and is traded in stock markets is known as a(n) ______.

Your friend Steve owns a considerable amount of common stock in Microsoft, a computer software company.He wants to cast his votes on various issues at the annual stockholders' meeting in Seattle, but he does not have the time to travel a great distance to the meeting.Instead of attending the meeting, Steve decides to register his votes by _____.

Roger helps his brother's business by contributing money, but he lets his brother take care of the daily operations of the business.Roger is also protected by limited liability.Roger is a _____.

Mergers are more common in Japan and Germany than they are in the United States.

All corporations operate primarily for profit.

To raise capital, Candace Tyson and Martha Black plan to sell stock to around 200 investors.They also want to avoid double taxation.Which type of business ownership would you recommend?

A corporation chartered in Canada and doing business in the United States is known as a foreign corporation in the United States.

A syndicate is a temporary association of individuals or firms organized to perform a specific task that requires a large amount of capital.

Darrell inherited a large amount of money from his uncle.Darrell wishes to start his own business, and his lawyers encourage him to make it a corporation.What disadvantage of a sole proprietorship are the lawyers trying to avoid?

Explain the differences among a domestic, a foreign, and an alien corporation.

A ____ is a merger between firms operating at different but related levels in the production and marketing of a product.

Kerry wants to start a business to sell handmade jewelry.She is very competent at making the jewelry and teaching others to make it, and she has saved a reasonable amount of money to start the business.Who of the following would make the best partner for Kerry?

Corporate officers are