ch 4 – Business Organization Flashcards
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Corporations distribute profits to their owners in the form of
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dividends
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A business's legal form of organization has no effect on how much taxes it pays.
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false
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A limited partnership involves a complete sharing in the management of a business.
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false
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A limited partnership always has at least one general partner, who assumes unlimited liability.
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True
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Sole proprietorships typically employ fewer than 50 people.
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True
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In creating a corporation, once the articles of incorporation are filed with the appropriate state office, the state may then issue a
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Corporate Charter
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If you want to go into business for yourself, the easiest way is a sole proprietorship.
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True
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In the US, men are twice as likely as women to start their own business.
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True
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About three-quarters of all businesses in the United States are sole proprietorships, and they earn somewhere around 10 percent of total business income. We may conclude that
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there are many sole proprietorships, but their average income is small.
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Which of the following is an advantage of a partnership?
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Ease of organization
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Which of the following is a disadvantage of a partnership?
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Difficulty of selling ownership
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Big City Financial is attempting to avoid a hostile takeover by a corporate raider by allowing stockholders to buy more shares of stock at prices lower than current market value. Which of the following methods is being used to avoid the takeover?
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a poison pill
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In most states, corporations must have "corporation," "incorporated," or "limited" in their names to show that their owners have limited liability.
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True
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A sole proprietorship is a popular form of business because
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it is easy to form
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In a partnership, all partners are equally liable.
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false
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A corporation doing business outside the state in which it is chartered is known as a(n)
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foreign corporation
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Sole proprietorships have the least degree of secrecy.
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False
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All states require partnerships to have articles of partnership.
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false
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Articles of partnership are required by many states for businesses that have two or more co-owners. The issues covered usually include all of the following except
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classes of stock to be issued
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Shark repellant is a method of thwarting a corporate takeover in which management requires a large majority of stockholders to approve the takeover.
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True
