ch 4 – Business Organization Flashcards

question

Corporations distribute profits to their owners in the form of
answer

dividends
question

A business’s legal form of organization has no effect on how much taxes it pays.
answer

false
question

A limited partnership involves a complete sharing in the management of a business.
answer

false
question

A limited partnership always has at least one general partner, who assumes unlimited liability.
answer

True
question

Sole proprietorships typically employ fewer than 50 people.
answer

True
question

In creating a corporation, once the articles of incorporation are filed with the appropriate state office, the state may then issue a
answer

Corporate Charter
question

If you want to go into business for yourself, the easiest way is a sole proprietorship.
answer

True
question

In the US, men are twice as likely as women to start their own business.
answer

True
question

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
answer

there are many sole proprietorships, but their average income is small.
question

Which of the following is an advantage of a partnership?
answer

Ease of organization
question

Which of the following is a disadvantage of a partnership?
answer

Difficulty of selling ownership
question

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?
answer

a poison pill
question

In most states, corporations must have “corporation,” “incorporated,” or “limited” in their names to show that their owners have limited liability.
answer

True
question

A sole proprietorship is a popular form of business because
answer

it is easy to form
question

In a partnership, all partners are equally liable.
answer

false
question

A corporation doing business outside the state in which it is chartered is known as a(n)
answer

foreign corporation
question

Sole proprietorships have the least degree of secrecy.
answer

False
question

All states require partnerships to have articles of partnership.
answer

false
question

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
answer

classes of stock to be issued
question

Shark repellant is a method of thwarting a corporate takeover in which management requires a large majority of stockholders to approve the takeover.
answer

True

Get instant access to
all materials

Become a Member