Vocabulary
The definition of sole proprietorship
A.) partner is not active in the daily running of the business and has limited responsibility for the debts and obligations of the business
B.) a business owned and run by a single individual
C.) business that is jointly owned by two or more persons
B
Owned and run by a single individual
Most common form of business organization
The smallest form of business
Easiest type of business to set up
Sole proprietorship
revenue from the sale of stock can be used to finance or expand operations.
Corporations also pay interest
Limited liability means the corporation is responsible for its debts and other regulations.
Unlimited life, meaning the corporation still exist, even if ownership is sold to someone else.
Ease of transferring ownership of the corporation.
What is Corporate
Definition of Corporation
A) A government document that gives permission to create a corporation
B) Temporary business that involves renting or leasing another firm successful business model
C) Form of business organization recognized by laws as a separate legal entity with all rights of an individual
C
Two types of stocks in Corporate?
Preferred stock, Common stock
respectable business and brand, you generally will gain more than you invested.
What is Franchise
Definition of Stock
A) Ownership certificates
B) Written promise to repay the amount borrowed at a later date
C) A check that transfers a portion of the corporate earnings to each stockholder
A
You want to start a landscaping business. Why might you choose to enter the business in a partnership rather than a sole partnership.
two or more partners could divide their roles in business and each could be in charge of section or area he understands better.
Start-up
Ease of management
Lack of separate taxes on income
Attract financial capital easier
Efficient operations come with slightly larger size
What is partnership
Definition if interest
A) The amount borrowed
B) The price paid for the use of the lender's money
C) Firm legally ceases to exist when the owner dies, quits, or sells the business
B
What is a risk of a partnership
One partner has unlimited liability
General Partnership causes an equal loss for all partners
Limited Partnership is limited by the size of the investment so if they contributed a certain amount and the partnership fails they are in debt by however much they gave
A partnership like proprietorship has a limited life
Potential conflict between the partners
What is partnership disadvantage
Definition of Franchisee
A) The actual owner of the business that lets other investors rent or lease its name, business profile, and way of doing business
B) temporary business investment that involves renting or leasing another firm successful business model
C) The investor who rents or leases the business model from the franchiser and then hopes to recoup his or her investment by selling the franchiser goods or services.
C
Why do many business owners prefer corporations over other forms of business organizations?
Corporations can make a profit, be taxed, and can be held legally liable. Corporations offer the strongest protection to its owners from personal liability
Owner has unlimited liability, you are personally responsible for all losses and debts
Difficulty of raising financial capital, it’s hard to find banks and lenders willing to give
Small size, limited financial capital may lead to downsizing
Difficulty of attracting qualified employees
What is sole proprietorship disadvantage