Sole Proprietorships/
Small Businesses
Small Businesses
A legal concept that holds a business owner personally liable for all of a business' debts.
What is unlimited liability?
A person who invests money in a business but has no management responsibility or liability for losses beyond the amount they invested
What is a limited partner?
The state that offers the lowest organizational costs for corporations and is known for being hospitable to new firms
What is Delaware?
The easiest type of business to form
What is a sole proprietorship?
A firm might use this to acquire another company in a hostile takeover
What is a tender offer?
Name one typical characteristic of entrepreneurs.
What is entrepreneurial spirit (desire to create a new business)? OR
What is independence? OR
What is the desire to determine one's own destiny? OR
What is the willingness to find and accept a challenge?
Individual who contributes labor and capital, operates the business, and agrees to abide by the provisions of the franchise agreement
What is the franchisee?
One of the advantages of a sole proprietorship
What is easy to form? OR
What is retention of profits? OR
What is no special taxes? OR
What is flexibility?
One of the disadvantages of partnerships
What is unlimited liability? OR
What is management disagreements? OR
What is lack of continuity? OR
What is frozen investment?
Distribution of earnings to stockholders of a corporation
What is a dividend?
The type of business that has the most sales revenues in the U.S.
What is a corporation?
The technique used to gather enough stockholder votes to control a targeted company
What is a proxy fight?
The number of small businesses in the U.S.
2 million? OR 31.7 million? OR 2 billion?
What is 31.7 million?
The company provides a known business name, management skills, training, and method of doing business
What is the franchisor?
One of the disadvantages of a sole proprietorship
What is unlimited liability? OR
What is lack of money? OR
What is limited management skills? OR
What is difficulty in hiring employees?
What is ease of start-up? OR
What is combined skills & knowledge of partners? OR
What is availability of capital & credit? OR
What is no special taxes?
These stock owners can vote on corporate matters
What is an owner of common stock?
The type of business that is the most popular. It accounts for 72% of the U.S.'s business firms
What is a sole proprietorship?
One of the advantages of a corporation
What is limited liability? OR
What is easy to raise capital?
More than 70% of people who start small businesses are approximately how old (approximate age range)?
18-24? 24-44? 44-65? 65+
What is 24-44 years of age?
Name one of the reasons why an individual would like to own a franchise
What is the opportunity to open a business with limited capital? OR
What is the opportunity to make use of the business experience of others? OR
What is the opportunity to sell to an existing clientele?
Small businesses (especially new ones) run a heavy risk of going out of business - about 50% survive at least how long?
2 years? 5 years? 8 years?
What is 5 years?
Partnerships represent this percentage of all U.S. businesses.
10% or 50% or 75%
What is 10%?
The top governing body of a corporation who are elected by stockholders. These individuals set company goals and develop general plans for meeting those goals.
What is the Board of Directors?
This type of corporation is organized to provide social, educational, religious, or other service rather than to earn a profit
What is a not-for-profit OR nonprofit?
One of the disadvantages of a corporation
What is double taxation? OR
What is difficult to form?
The industry category that accounts for nearly half of all small businesses
What is the services industry?
The largest franchise with over 38,000 locations worldwide
What is McDonald's?
A government agency that assists, counsels, and protects the interests of small businesses in the U.S.
What is the Small Business Administration (SBA)?
An agreement that lists and explains the terms of the business arrangement.
What is a partnership agreement? OR
What is the Articles of Partnership?
Owners of ___________ stock are paid before owners of common stock.
What is preferred?
This form of business ownership combines the benefits of a corporation and a partnership while avoiding some of the restrictions and disadvantages of those forms of ownership
What is a Limited Liability Company (LLC)?
A corporation that is taxed as though it were a partnership. No more than 100 stockholders are allowed.
What is an S Corporation?
Money that is invested in small business and sometimes struggling firms that have the potential to become very successful
What is venture capital?
Name one advantage for a franchisor
What is a fast or well-controlled distribution of products? OR
What is minimal capital outlay?