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Exam 5: Forms of Business Ownership

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Question 61

Multiple Choice

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Restricted operating freedom in franchising means that the franchisee must conform to which of the following?

A) obtaining permission before changing the product
B) hiring employees from select groups
C) operating in a specific,defined territory
D) advertising only online

E) A) and B)
F) A) and C)

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Question 62

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When Ashland Plastics and Melamine Chemicals formed a joint venture to develop flame-resistant plastic sheeting,the relationship most likely ended as soon as the project was completed.

A) True
B) False

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Question 63

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Who are the owners of a corporation?

Which of the following statements about a general partnership is most accurate?

Double taxation is a distinct advantage that corporations have over other forms of ownership.

For partnerships to be legal,they must be established in writing.

What is the first step in incorporating a company?

A local lumber company's purchase of a window and door manufacturer is an example of which of the following type of merger?

List the two basic types of partnership.

Tara Brtek owns and operates the Singing Pig Food Company.Brtek makes and markets 20 different gourmet mustards,salsas,marinades,and dip mixes using its crooning pig logo.Brtek has been thinking about changing her sole proprietorship to a corporation so she can take advantage of which of the following?

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

When companies in the same industry merge to achieve economies of scale and to expand their product lines,it is called a horizontal merger.

Sole proprietorships experience which of the following tax situations?

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

What is the first step in incorporating a company?

Sam Beauvois has invested $10,000 in his son's pizza restaurant,but takes no part in its management.What is Beauvois?

Thom Georges wants to open a store to sell antique architectural features that he can salvage from old houses being torn down.He has an eye for the kind of doors,windows,mantels,and so forth that decorators want,but he does not have all the funding he needs.He has invited his parents to invest $40,000 in the enterprise.He has told them that if they do invest,they would have liabilities in the firm equal to but no greater than their investment.Georges is trying to get them to form which of the following?

Which of the following is an advantage of sole proprietor ownership?

A disadvantage of a partnership is that any partner may have to pay all of the debts of the company regardless of who incurred the debts.

Adam Ratchasky purchased a franchise from Midas Muffler.Adam is the ____________________ in this franchise agreement.