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Exam 4: Choosing a Form of Business Ownership

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Question 31

True/False

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Unlimited liability holds a sole proprietor personally responsible for all the debts of the business.

A) True
B) False

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Question 32

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Anyone with the money can purchase shares of Coca-Cola's stock.This makes Coca-Cola a(n) ____ corporation.

A) closed
B) open
C) domestic
D) foreign
E) alien

F) C) and D)
G) B) and C)

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Question 33

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The courts have held that an oral partnership agreement is not legally binding and, therefore, cannot be enforced.

All of the following are advantages of the partnership form of organization except

In a limited partnership, a limited partner's name must be included in the partnership's name.

Preferred stockholders receive dividends before dividends are paid to common stockholders.

The Boy Scouts and United Way are both examples of _____.

Unlimited liability means

B&G, Inc. A year ago, Kevin went to work for B&G, Inc.He has worked for the finance department ever since he started.He noticed that the corporation was only taxed as though it were a partnership.This was something that he found very odd when he first started working for the company, but he later realized it was a fairly common practice.He recognized that this was one of the advantages of this type of corporation. While the job was challenging, Kevin was not happy.He wanted to work for a company whose main goal was to provide service to the community, not to make a profit.However, Kevin felt that, considering his present financial situation, he had to continue working for B&G, Inc.A week later, Kevin discovered there was going to be a merger between B&G, Inc.and one of its major competitors.Kevin's boss informed him that he would be getting a promotion and a raise.While he was excited about making more money, he still was not happy.He knew then that he would not be working for the company for long. -Refer to B&G, Inc.B&G, Inc.was going through a ____ merger.

A master limited partnership is taxed like a corporation.

Describe the advantages and disadvantages of the sole proprietorship form of ownership.

Because of unlimited liability, it is easy for sole proprietors to borrow large sums of money.

A common tactic of corporate raiders is to start a proxy fight.

Because there are two or more people in a general partnership, bankers, suppliers, and other creditors are not concerned about unlimited liability.

Mercedes-Benz, which is chartered as a corporation in Germany but conducts much of its business in the United States, is known as a(n) ____ in the United States.

A general partner is responsible for any debts of the partnership, regardless of whether he or she was directly involved in the transaction that created the debt.

What is the difference between a joint venture and a syndicate?

A merger between firms in completely unrelated industries is known as a _____.

Which form of business is the easiest to start?

A tender offer is an offer to purchase stock from existing stockholders.