BUSNESS Midterm CH 6 Essay

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Historically, the three basic forms of business ownership in the United States have been the:
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sole proprietorship, partnership, and corporation.
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A __________ maintains limited liability but offers more flexibility in terms of tax treatment than other forms of business ownership.
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limited liability company
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Based on data gathered from the U.S. Census Bureau, __________ are less common than __________ but they tend to be larger and more profitable than __________.
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partnerships; sole proprietorships; corporations
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The majority of businesses today are formed as
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sole proprietorships.
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From the standpoint of an owner, a major advantage of the sole proprietorship is the:
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retention of control.
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What are the three types of partnerships?
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general, limited, and limited liability
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A __________ is a voluntary agreement between two or more people to jointly own a business.
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partnership
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All of the following are drawbacks of general partnerships EXCEPT
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inability to pool financial resources.
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Walmart, ExxonMobil, Intel, and virtually all other large companies in the U.S. are organized as
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C corporations.
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In most states, the document that owners must file in order to form a corporation is referred to as the
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articles of incorporation.
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Stockholders are __________ of a corporation. They have the right to vote on issues affecting the operation of the business.
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owners
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__________ are organizations, such as mutual funds, insurance companies, or pension funds, that pool contributions from a large number of investors, clients, or depositors to buy stock and other securities.
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Institutional investors
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All of the following are duties of a company’s board of directors EXCEPT
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take an active role in the daily operations.
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A key advantage of a corporation is that
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the owners maintain limited liability.
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A corporation must register as a __________ in every state in which it operates other than its state of incorporation.
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foreign corporation
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A nonprofit corporation enjoys the benefit of
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earnings that are exempt from state and federal taxes.
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A(n) __________ occurs when one firm buys another firm.
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acquisition
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A(n) __________ occurs when two companies agree to combine operations to form a new company.
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merger
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The __________ is a relatively new and increasingly popular form of business ownership that is like a corporation in some ways and like a partnership in others.
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limited liability company
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The __________ is the business entity in a franchise relationship that allows others to operate a business using resources it supplies in exchange for money and other considerations.
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franchisor

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