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