Business Types
A form of business ownership in which the owners share the risk of loss and the chance for
profit is a
partnership
Janet had to sell her car and vacation condo to pay her business debts. Janet’s situation is
an example of __________
unlimited liability
The purpose of forming partnerships is often to combine capital, experience, and
abilities
Corporations are governed by a(n) __________
board of directors
The form of ownership affects the business owner’s control, liability, and __________.
taxation
Name the form of business ownership that is considered an artificial being
corporation
Improper use of licensed material may result in a __________.
lawsuit
When franchisees pay their parent companies a percentage of their annual profits, it is called
a __________ fee.
royalty
If Jane is an owner of Microsoft, she is called a __________
shareholder or stockholder
What type of corporation must have 100 or fewer shareholders?
“S” corporation
Tom works as a computer consultant on his own. He obtains and services his customers,
and handles all billing and collections. What form of ownership is Tom’s business?
sole
proprietorship
Illegally operated multi-level marketing operations that require potential members to pay an
initial investment fee are often referred to as __________.
pyramid schemes/pyramid clubs
What business arrangement pays commission on sales to people at two or more levels?
multi-level marketing
Pam has arranged to sell Goodyear tires in her automotive supply store. She has entered into
a __________ franchising agreement.
product trade-name
Name the type of corporation that sells millions of shares of stock.
“C” corporation
Gene invested $8,000 in his cousin’s sports equipment business. He didn’t participate in the
day-to-day business activities. This is an example of a(n) __________ partnership.
limited
An advantage in developing a joint venture is that new target markets and profit centers can
be created for less __________ than doing it alone.
Money
Why do people often become distributors for multi-level marketing businesses?
tried/like
the product
What are the owners of an LLC called?
Members
What form of business ownership combines the benefits of a corporation with those of a sole
proprietorship or partnership?
hybrid
Name the type of corporation which operates to accomplish a specific mission—other than to
earn income.
nonprofit
Joint ventures are used by many companies who want to expand their businesses
__________.
Internationally
Licensing agreements are usually established for a specific activity for a limited __________.
Time
What type of business arrangement involves an owner granting permission to use
trademarked, copyrighted, or patented material to another entity?
licensing
LLC stands for __________
limited liability company