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Exam 4: Choosing a Form of Business Ownership

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Question 51

True/False

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A corporation chartered in Canada and doing business in the United States is known as a foreign corporation in the United States.

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verified

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Question 52

Multiple Choice

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The Smithsonian Institution exists to preserve historical and cultural items of value and to share those items with the public; it does not exist to maximize the wealth of any shareholders. This entity is organized as a(n)

A) cooperative.
B) quasi-government corporation.
C) S-corporation.
D) not-for-profit corporation.
E) closed corporation.

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Question 53

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Samantha's Dilemma Samantha graduated from college and needed to decide where she wanted to work. She had several options. Her aunt Julie owned and operated a small business that she started about twenty years ago. Julie, an individual owner of her business, informed Samantha that she could work for her. On one hand, Samantha thought it would be a great opportunity to be able to work for her aunt, learn the business, and then run the business when her aunt retires. On the other hand, she also felt that she wanted something a little more challenging; a job where she could really use her education. Her other option would be to work for a company that a friend and her husband had started and jointly owned. It was a rapidly growing company with plenty of opportunity for advancement. However, Samantha had some reservations about this choice because she was not sure she wanted to work for friends. Her last option was to work for a large retail company, headquartered in Maryland, which had stores across the United States. After much consideration, Samantha decided she didn't want an opportunity and a job because someone knew her. She wanted to prove how motivated and hardworking she was. Once she weighed all the advantages and disadvantages of her different options, she decided to work for the large retail company so that she could gain the most experience for herself. -Refer to Samantha's Dilemma. What would not be an advantage of Samantha's aunt's business?

Judy Barnes, Betty Turley, and Bob Turner want to obtain limited liability for their business, but they want to avoid double taxation. Which type of business ownership would you recommend?

Samantha's Dilemma Samantha graduated from college and needed to decide where she wanted to work. She had several options. Her aunt Julie owned and operated a small business that she started about twenty years ago. Julie, an individual owner of her business, informed Samantha that she could work for her. On one hand, Samantha thought it would be a great opportunity to be able to work for her aunt, learn the business, and then run the business when her aunt retires. On the other hand, she also felt that she wanted something a little more challenging; a job where she could really use her education. Her other option would be to work for a company that a friend and her husband had started and jointly owned. It was a rapidly growing company with plenty of opportunity for advancement. However, Samantha had some reservations about this choice because she was not sure she wanted to work for friends. Her last option was to work for a large retail company, headquartered in Maryland, which had stores across the United States. After much consideration, Samantha decided she didn't want an opportunity and a job because someone knew her. She wanted to prove how motivated and hardworking she was. Once she weighed all the advantages and disadvantages of her different options, she decided to work for the large retail company so that she could gain the most experience for herself. -Refer to Samantha's Dilemma. What type of company does Samantha's friend operate?

Which of the following is necessary for starting a sole proprietorship?

The purchase of one corporation by another is referred to as a

A corporation whose stock can be purchased by anyone and is traded in stock markets is known as a(n)

Which of the following is not a disadvantage of sole proprietorships?

In all states besides the one in which it is incorporated, a business is known as a(n)

Explain the differences among a domestic, a foreign, and an alien corporation.

With regard to taxation of partnerships, which of the following statements is correct?

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.

​Maurice would like to own a train store and operate it by himself. He has enough money to open it and operate it on his own and elects to do so. What form of business is this?

Stephen decides his business will begin staying open until 7 p.m. instead of 6 p.m. The next day, the shop stays open until 7 p.m. This environment of flexibility to quickly change is characteristic of what form of business organization?

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 practic 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 rais -Refer to B&G, Inc. Which of these features does not belong to this type of corporation?

Which of the following would least likely be stated in the articles of partnership?

What do experts believe is likely to become one of the most popular types of business organizations?

The Reader's Digest Association began as an open corporation and later changed to a closed corporation.

Why is the concept of unlimited liability a concern for the sole proprietor?