What type of liability does a general partner of a limited partnership have for the debts and obligations of the limited partnership?

Unlimited personal liability More test answers on https://studyhippo.com/legal-environment-of-business-final/

In what type of business do the owners bear no personal financial responsibility for the company’s debts and obligations? A. Partnerships. B. Corporations. C. Sole proprietorships. D. In all of the businesses listed in the other answers.

B. Corporations. More test answers on https://studyhippo.com/econ130-exam-1-ch123/

Liabilities: possess service potential. are things of value owned by a business. are future economic benefits. are debts and obligations.

are debts and obligations. More test answers on https://studyhippo.com/chapter-1-test-test-answers/

Which of the following would be an example of a corporation? a. The dissolution of Nutrimax Pizzas results in its owners having to repay the debts of the firm. b. The profits earned by Luxe Clothing are legally considered as the income of the firm’s owners. c. Sparkles is a business firm owned by a single person who takes up complete liability for the business. d. The owners of Octave Inc. are not personally responsible for the debts and obligations of the firm.

d More test answers on https://studyhippo.com/business-6/

Debts And Obligations test questions and answers | Get Access To Debts And Obligations Flashcards and exam tests

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Business Law Debts And Obligations Equal Protection Under The Law Legal Management Limited Liability Companies Limited Liability Company Uniform Partnership Act

Economics Unit 3 – Key Terms – Flashcards 66 terms

Keisha White

66 terms

Preview

Economics Unit 3 – Key Terms – Flashcards

question

Firm

answer

A business organisation such as a corporation, limited liability company, or partnership

question

Public limited companies / PLCs

answer

Large firms owned by thousands of shareholders, who employ managers or executives to run the business

question

Marginal returns

answer

The increase in output that results from adding an extra input to the firm

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Specialisation

answer

A method of production where specific products or tasks are assigned to certain workers, so that they become every skilled at the specific task

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Short run

answer

The period of time in which at least one factor of production is fixed

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Long run

answer

The period of time in which are factors of production are variable

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The law of diminishing returns / the law of diminishing marginal productivity

answer

Sets in when the marginal product of labour, or another variable factor, starts to fall. This happens when one more unit of input adds less to total output than the previous unit of input.

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Technological change

answer

A change in the ability of a firm to produce at a different level of output with a given quantity of inputs

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Invention

answer

The creation or original design of something that has not existed before

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Innovation

answer

The act of making changes in, or developing, something already established, especially by introducing new ideas, methods and products

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Equilibrium

answer

A state of balance or rest, in which there is no reason for anything to change unless it is disturbed. In microeconomics, we usually see equilibrium as the point at which planned demand is equal to planned supply in a market

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Normal profit

answer

The minimum level of profit needed to keep existing firms in production, while being insufficient to attract new firms into the market. It is included in the firm's ATC curve, because a firm must make normal profit to stay in business

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Supernormal profit

answer

Any extra profit above normal profit. In the long-run, and in the absence of barriers to entry, supernormal profit performs the function of attracting new firms in the market

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Monopoly

answer

A situation in which a single firm owns all, or nearly all, of the market for a given product or service. A pure monopoly owns 100%, whereas a monopoly can own 25% or more.

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Cartel

answer

A group of colluding firms that fix prices, forming a price ring, and often also divide up the market by allocating maximum levels of output for each firm. Usually seen in an oligopolistic market.

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Game theory

answer

An analysis of strategic situations or games, in which the success of an individual, a firm, or a government, when making choices, depends on the choices of others

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Price discrimination

answer

Occurs when firms charge different prices to different consumers for the same product, based on differences in their ability and willingness to pay

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Contestable market

answer

A market in which the potential exists for firms to enter and leave the market, without incurring entry or exit costs. There are no sunk costs.

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Sunk costs

answer

Costs that are incurred when a firm enters a market, which it cannot recover if it decides to leave the market. An example is spending on advertising

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Hit-and-run entrants

answer

Firms that enter the market, make a quick profit, and leave. The ease of entry and exit in contestable markets allows this to happen

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Marginal revenue product / MRP

answer

The monetary value of the addition to a firm's total output brought about by employing one more worker

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Marginal physical product / MPP

answer

Also known as the marginal returns of labour, this is the increase in output that results from adding an extra input to the labour force

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Average cost of labour

answer

The total wage costs, divided by the number of workers employed

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Marginal cost of labour

answer

The addition to a firm's total cost of production resulting from employing one more worker

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Monopsony

answer

A single buyer in a market, just as a monopoly is a single seller

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Income

answer

A flow of money going to a factor of production, such as wages paid to workers, profits to businesses or benefits given to those who require them. It is measured per period of time, such as weekly, monthly or annually

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Wealth

answer

The stock of physical assets, such as land, houses and art, and financial assets, such as stocks and shares, which accumulates over time

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Market failure

answer

Occurs whenever the market mechanism or price mechanism performs unsatisfactorily, resulting in a misallocation of resources

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Partial market failure

answer

When the market still functions, but either produces the wrong quantity, or sets the wrong price

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Complete market failure

answer

The market does not supply any products. There is a 'missing market'

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Public good

answer

A good which exhibits the characteristics of non-excludability and non-rivalry

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Non-excludability

answer

People cannot be prevented from using the good or consuming its benefits

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Non-rivalry

answer

Consumption of the good by one person does not limit the benefits for other people

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Pure public good

answer

A public good for which it is impossible to exclude free-riders, such as national defence and police

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Quasi-public good

answer

A near public good, which is semi-non-rival and semi-non-excludable

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Negative externality

answer

An external cost for a third party, as a result of an economic activity

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Positive externality

answer

An external benefit for a third party, as a result of an economic activity

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Information failure / imperfect information

answer

When people have inaccurate, incomplete, uncertain or misunderstood data, so make potentially 'wrong' choices

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Asymmetric information

answer

When somebody (the consumer or the producer) knows more about a product than someone else in the market, making it difficult for them to do business

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Property rights

answer

Rights provided by law, to determine how a resource is used and whether that resource is owned by the government or by individuals

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The Tragedy of the Commons

answer

An economic theory by Garrett Harding, which states that individuals acting independently and rationally, according to their own self-interest, behave against the best interests of the whole group by depleting some common resource

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Tax

answer

A compulsory contribution to state revenue, levied by the government, either indirect such as VAT, or direct such as income tax

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Subsidy

answer

A grant given by the government which lowers the price of a good, and is usually designed to encourage production or consumption

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Direct provision

answer

When the government intervenes in the market to provide merit goods or public goods

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Pollution permit

answer

A licence given to a firm allowing them a legal right to pollute a certain amount per year

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Public ownership

answer

A state in which a firm is owned by the government

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Nationalisation

answer

When a firm is taken into public ownership

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Privatisation

answer

When state-owned assets are sold to the private sector

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Regulation

answer

The imposition of laws or rules regarding private-sector enterprise

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Regulatory capture

answer

Allegedly occurs when a regulator, such as the government, acts in the interest of the powerful firms it is supposed to be constraining, rather than in the interest of the consumers it is supposed to protect

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De-regulation

answer

The removal of government legislations and laws in a particular market, often involving removing barriers to competition

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Competitive tendering

answer

An auction process in which large investors or firms bid for the right to run a certain service or gain a certain contract

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Internal market

answer

Also known as a quasi-market, it is a public sector structure, designed to reap the efficiency gains of free markets, without losing the equity benefits of traditional public systems

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Public private partnership / PPP

answer

A situation in which the public sector and the private sector work in conjunction on a project, usually an infrastructure project such as a road

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Equality

answer

'Sameness' - all people are treated the same and provided with the same things. It is a positive concept as it can be measured

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Equity

answer

'Fairness' - a normative concept as it cannot be measured

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Horizontal equity

answer

Treating people in the same circumstances equally, for example, households with the same income and personal circumstances must pay the same income tax, and are eligible for the same welfare benefits

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Vertical equity

answer

Taking income from the rich, and redistributing it to the poor. This is controversial

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Relative poverty

answer

The government defines the relative poverty level as those earning below 60% of average earnings for an area

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Absolute poverty

answer

When a person cannot provide for his/her basic needs, including food, water and shelter

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Progressive taxation

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A tax that takes a larger percentage from the income of high-income earners, than it does from low-income earners. An example is income tax in the UK

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Regressive taxation

answer

A tax that takes a larger percentage from the income of low-income earners, than it does from high-income earners. An example is VAT in the UK

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Transfer payment

answer

A payment made to individuals by the government in order to redistribute income, such as welfare benefits

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Government failure

answer

When government intervention to resolve a market failure creates inefficiency and causes the problem to worsen

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Cost-benefit analysis / CBA

answer

A technique for evaluating all the costs and benefits of any economic action or decision, including all the social costs and benefits to the community and not just the private costs and benefits that happen to the economic agent undertaking the action

question

Shadow pricing

answer

Placing a monetary value on a good which does not already have a monetary value, because it is not traded in a market

STUDY

Business Business Fundamentals Debts And Obligations Economics

economics 3 – Flashcards 32 terms

Sonia Kelly

32 terms

Preview

economics 3 – Flashcards

question

unlimited liability

answer

required that an owner is personally and fully responsible for all loss and debts

question

inventory

answer

stock of goods held in reserve; includes finished goods waiting to be sold and raw materials to be used in production

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limited life

answer

situation in which a firm legally ceases to exist when an owner dies, quits, or a new owner is added; applies to sole proprietorships and partnerships

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limited partnership

answer

form of partnership where one or more partners are not active in the daily running of the business, and whose liability for the partnership's debt is restricted to the amount invested in the business

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bankruptcy

answer

court-granted permission to an individual or business to cease or delay payment on some or all debts for a limited amount of time

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charter

answer

written government approval to establish a corporation; includes company name, address, purpose of business, number of shares of stock, and other features of the business

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stock

answer

certificate of ownership in a corporation; common or perferred stock

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stockholder

answer

person who owns a share or shares of stock in a corporation; same as shareholders

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shareholder

answer

stockholder

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dividend

answer

check paid to stock holders, usually quarterly, representing portion of corporate profits

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bond

answer

formal contract to repay borrowed money and interest on the borrowed

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principle

answer

amount borrowed when getting a loan or issuing a bond

question

interest

answer

payment made for the use of borrowed money; usually paid at periodic intervals for long term bonds or loans

question

double taxation

answer

feature of taxation that allows stockholders' dividends to be taxed both as corporate profit and as personal income

question

merger

answer

combination of two or more business enterprises to form a single firm

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income statement

answer

report showing a business's sales, expenses, and profits for a certain period, usually three months for a year

question

net income

answer

measure of business profits determined by subtracting all expenses, including taxes, from revenue

question

Cash flow

answer

total amount of new funds the business generates from operations; broadest measure of profits for a firm, includes both net income and non-cash charges

question

horizontal merger

answer

combination of two or more firms producing the same kind of product

question

vertical merger

answer

combination of firms involved in different steps of manufacturing and marketing

question

conglomerate

answer

firm with four or more businesses making unrelated products, with no single business responsible for a majority of its sales

question

multinational

answer

corporation producing and selling without regard to national boundaries and whose business activities are located in several different countries

question

nonprofit organization

answer

economic institution that operates like a business but doesn not seek financial gain ; schools, churches, community service organizations

question

cooperative

answer

nonprofit association performing some kind of economic activity for the benefit of its members

question

co-op

answer

cooperative

question

credit union

answer

nonprofit service cooperative that accepts deposits, makes loans, and provides other financial services

question

labor union

answer

organization that works for its members; interests concerning pay, work hours, health coverage, fringe benefits, and other job related matters

question

collective bargaining

answer

process of negotiation between union and management representatives over pay, benefits, and job related matters

question

professional association

answer

nonprofit organization of professional or specialized workers seeking to improve working conditions, skill levels, and public perceptions of its profession

question

chamber of commerce

answer

nonprofit organization of local business value whose purpose is to promote their interest

question

better business bureau

answer

business sponsored non profit organization providing information on local companies to consumers

question

public utility

answer

company providing essential services such as water and electricity to consumers, usually subject to some government regulations

STUDY

Accounting Current Replacement Cost Debts And Obligations Finance Financial Accounting Real Estate

Accounting 2010 chapter 3 – Flashcards 17 terms

Karlie Mack

17 terms

Preview

Accounting 2010 chapter 3 – Flashcards

question

The accountant for Max Corp. failed to make the adjusting entry to record depreciation for the current year. The effect of this error is which of the following?

answer

Asset, net income, and stockholder's equity are all overstated.

question

If a real estate company fails to accrue commission revenue

answer

assets are understated, and net income is understated

question

All of the following statements are true except one. Which statement is false? A. adjusting entries are required for a business that uses the cash basis B. a fiscal year may end on some date other than December 31. C. The expense recognition principle directs accountant to identify and measure all expenses incurred and deduct them from revenues earned during the same period D. Accrual accounting produces better information than cash-basis accounting

answer

A. Adjusting entries are required for a business that uses the cash basis.

question

The account Unearned Revenue is a(n):

answer

Liability

question

Adjusting entries A. are needed to measure the period's net income or net loss B. do not debit or credit Cash C. update the accounts D. all of the above

answer

D. all of the above

question

Adjusting entry that debits an expense and credits a liability is which type?

answer

Accrued expense

question

On a trial balance, which of the following would indicate that an error has been made? A. salary expense has a debit balance B. service revenue has a debit balance C. Accumulated Deprecation has a credit balance D. All of the above indicate errors

answer

B. Service Revenue has a debit balance

question

The entry to close Management Fee Revenue would be which of the following?

answer

Management Fee Revenue Retained Earnings

question

Which of the following accounts is not closed? A. Dividends B. Interest Revenue C. Depreciation Expense D. Accumulated Depreciation

answer

D. Accumulated Depreciation

question

FedEx earns service of $750,000. how does this transaction affect FedEx's current and debt ratios?

answer

A. Improves both ratio

question

Suppose Rose Corporation borrows $10 million on a 10-year note payable. How does this transaction affect Rose's current ratio and debt ratio?

answer

Improves the current ratio and hurts the debt ratio

question

In which month should revenue be recorded?

answer

In the month that goods are shipped to the customer

question

An adjusting entry recorded June salary expense that will be paid in July. Which statement best describes the effect of this adjusting entry on the company's accounting equation?

answer

Assets are not affected, liabilities are increased, and stockholders' equity is decreased

question

What is the effect on the financial statements of recording depreciation on equipment?

answer

Net income, assets, and stockholders' equity are all decreased

question

For 2014, Wyndham Company had revenues in excess of expenses. Which statement describes Wyndham's closing entries at the end of 2014 (assume there is only one closing entry for both revenue and expenses)?

answer

Revenues will be debited, expenses will be credited, and retained earnings and will be credited.

question

Which of the following accounts would not be included in the closing entries?

answer

Accumulated Depreciation

question

A major purpose of preparing closing entries is to:

answer

Update the Retained Earnings account

STUDY

Business Business Management Chief Executive Officer Chief Operating Officer Debts And Obligations Internal Revenue Code Limited Liability Partnership

Better Business 101 – Chapter 6 – Flashcards 35 terms

Owen Clarke

35 terms

Preview

Better Business 101 – Chapter 6 – Flashcards

question

Sole proprietorships

answer

A type of unincorporated business owned and usually controlled by a single individual.

question

Unlimited liability

answer

If business assets aren't enough to pay business debts, then personal assets, such as a house, can be used to pay the balance. The proprietor can lose an unlimited amount of personal assets.

question

Partnership

answer

A type of business structure in which two or more entities (or partners) share the ownership and the profits and losses of the business.

question

Partnership agreement

answer

A written agreement between the partners of a partnership.

question

Capital

answer

Money in a business

question

General partnership

answer

A type of partnership that is the default arrangement for a partnership and is the simplest of all partnerships to form.

question

Limited partnership

answer

A type of partnership in which these partners are as involved as investors and as such are personally liable only up to the amount of their investment in the business and must not actively participate in any decisions of the business.

question

General partners

answer

Full owners of a partnership business, are responsible for all the day-to-day business decisions, and remain liable for all the debts and obligations of the business.

question

Limited partners

answer

As involved as investors, and as such, are personally liable only up to the amount of their investment in the business. They must not actively participate in any decisions of the business.

question

Master Limited Partnership

answer

A business structure that combines the tax benefits of a limited partnership, but it is similar to a corporation in that it is publicly traded on a securities exchange.

question

Limited liability partnership

answer

A form of business structure in which it protects the partners not only from any debt or liability incurred by the business but also from the liability of another partner.

question

Corporation

answer

A specific form of business organization that is legally formed under state laws. It's considered a separate entity apart from its owners; it has legal rights like an individual, can own property, assume liability, pay taxes, enter into contracts, and sue or be sued.

question

C corporation

answer

Refers to Subchapter C of the Internal Revenue Code by which it is governed.

question

S corporation

answer

A regular corporation that has elected to be taxed under a special section of the Internal Revenue Service code called Subchapter S.

question

Shareholders

answer

When an entity or individual has an ownership interest in the company. (AKA stockholders)

question

Stockholders

answer

When an entity or individual has an ownership interest in the company. (AKA shareholders)

question

Apportioned ownership interest

answer

When the corporation provides the shareholders with stock certificates identifying the number of shares they own.

question

Publicly owned corporation

answer

A corporation regulated by the US Securities and Exchange Commission because the shares of ownership can be traded on public stock exchanges.

question

Board of directors

answer

Members of this group select and hire the business' management team of corporate officers as well as they make the major financing and business decisions for the corporation.

question

Chief executive officer

answer

The one who is typically responsible for the entire operations of the corporation and reports directly to the board of directors.

question

Chief financial officer

answer

The one who reports directly to the CEO and is responsible for analyzing and reviewing the business' financial data, reporting its financial performance, preparing budgets, and monitoring the firm's expenditures and costs.

question

Chief operating officer

answer

The one who is responsible for the day-to-day operations of the organization and reports directly to the CEO.

question

First-line managers

answer

People who directly supervise lower-level employees and help run the business.

question

Double taxation

answer

Occurs when taxes are paid on the same income twice.

question

Limited Liability Company

answer

This business entity combines the corporate advantages of limited liability with the tax advantages inherent in sole proprietorship and partnerships.

question

Merger

answer

When two companies come together cooperatively to form one company.

question

Acquisition

answer

When one company completely buys out another company.

question

Synergy

answer

The effect achieved when two companies combine and the result is better than each company could achieve individually.

question

Horizontal merger

answer

A type of merger in which two companies sell the same types of products and are in direct competition with each other.

question

Vertical merger

answer

A type of merger between two companies that have a company/customer relationship or a company/supplier relationship.

question

Product extension merger

answer

A type of merger between two companies selling different but related products in the same market.

question

Market extension merger

answer

A type of merger between two companies that sell the same products in different markets.

question

Conglomeration

answer

A type of merger between two companies that have no common business areas but instead merge to obtain diversification.

question

Articles of organization

answer

The title of the document filed to create a corporation.

question

Cooperative

answer

A business that is owned and governed by members who use its products or services.

STUDY

Business Law Debts And Obligations Legal Management Limited Liability Company

blaw chapter 33 – Flashcards 70 terms

Alice Rees

70 terms

Preview

blaw chapter 33 – Flashcards

question

A limited liability company is operated in compliances with state law.

answer

true

question

A limited company is a legal entity apart from its owners.

answer

true

question

Federal law dictates the requirements for the formation of a limited liability company.

answer

false

question

Forming a limited liability company requires filing articles of organization in a state office.

answer

true

question

For federal jurisdictional purposes, a limited liability company can choose to be treated like a corporation.

answer

false

question

The members, managers, and agents of a limited liability company are liable for its obligations by virtue of their status.

answer

false

question

A limited liability company limits the personal liability of its members.

answer

true

question

For federal income tax purposes, a limited liability company can choose to be taxed like a corporation.

answer

true

question

A limited liability company cannot be taxed as a partnership.

answer

false

question

A foreign limited liability company (LLC) is an LLC owned by an entity outside the United States.

answer

false

question

An operating agreement for limited liability company need not be in writing.

answer

true

question

A limited liability company is required to have an operating agreement.

answer

false

question

Most limited liability company (LLC) statues provide that unless the members agree otherwise, all profits of the LLC will be divided equality.

answer

true

question

In a limited liability company, members must participate in the management of the company.

answer

false

question

In a limited liability company, members cannot participate in its management.

answer

false

question

In a limited liability company, members do NOT have to participate in its management.

answer

true

question

Most limited liability company statutes have strict provisions regulating members' meetings.

answer

false

question

The dissociation of a member of a limited liability company in violation of the operating agreement is legally wrongful.

answer

true

question

Unless otherwise agreed, the participants in a joint venture have an equal voice in controlling the enterprise.

answer

true

question

Giving control of a joint venture to one of its participants does not affect the status of the relationship.

answer

true

question

A joint venture is taxed like a partnership.

answer

false

question

Unless otherwise agreed, the participants in a joint venture share its profits equally.

answer

true

question

A joint venture does not terminate unless one of its participants dies.

answer

false

question

The participants in a joint venture have more implied and apparent authority than the partners in a partnership.

answer

false

question

A cooperative may take the form of a corporation.

answer

true

question

A syndicate may exist in the form of a partnership but not a corporation.

answer

false

question

A group of individuals getting together to finance a particular project may form a syndicate.

answer

true

question

The owners of a joint stock company are personally liable for its obligations.

answer

true

question

In some states, business trusts pay corporate taxes.

answer

true

question

The owners of an incorporated cooperative are personally liable for its obligations.

answer

false

question

A syndicate may be organized as a corporation but not as a partnership.

answer

false

question

The beneficiaries of a business trust are personally liable for its obligations.

answer

false

question

Like a corporation, the ownership of a joint stock company is represented by shares of stock.

answer

true

question

The owners of an unincorporated cooperative have joint liability for its obligations.

answer

true

question

A business trust is created by a written trust agreement.

answer

true

question

Fay is a member of Garden Groves LLC. Like other members of limited liability companies, Fay's liability for Garden Groves's obligations resembles the liability of...

answer

(d) a shareholder of a corporation

question

High Pointe LLC's members include Irvin. For purposes of holding title to property, High Pointe is...

answer

question

Bee Hive Honey, LLC's members include Chad. For purposes of suing and being sued, Bee Hive Honey is...

answer

question

Greta is a member of Hovercraft LLC. As a member, Greta is...

answer

question

Dani is considering forms of business organization for her financial advisory firm. Like most states, Dani's state requires that to form a limited liability company, she must file with a central state agency...

answer

question

Location Realty LLC is a limited liability company. Like other LLCs, for federal jurisdictional purposes, Location Realty is most likely a citizen of...

answer

(b) every state in which its members are citizens

question

Mit-E Mart LLC was formed in New Jersey. Mit-E Mart's members are Odel, who is a citizen of New Jersey, and Pola, who is a citizen of New York. For federal diversity jurisdictional purposes, Mit-E is a citizen of...

answer

question

Jay is a member of Kappa, LLC, a limited liability company. Jay is liable for Kappa's debts...

answer

(b) to the extent of his capital contribution

question

Energy Resources, LLC, is a limited liability company. Rather than dis-tribute its profits to its members, Energy wants to reinvest the profits in its business. For this reason, Energy may prefer to be taxed as...

answer

(a) a corporation

question

China Bank is a foreign entity—a firm owned and operated by investors in a foreign country. With respect to an LLC in the United States, China Bank can...

answer

(b) become a member

question

QuizBooks LLC is a limited liability company. Like any other LLC, unless QuizBooks chooses otherwise, the firm will be taxed as...

answer

question

Serious Gamers, LLC, is a limited liability company. Among the mem¬bers, a dispute arises that their operating agreement does not cover. No statute applies. The dispute is governed by the principles of...

answer

(b) partnership law

question

CPA Accounting, LLC, is a limited liability company. If the law in CPA's state is like the law in most states, unless the members have agreed other-wise, participants in the firm's management will be considered to include...

answer

(a) all members

question

Kristal is a member of Laboratory CSI Services, LLC, a limited liability company. Kristal can participate in the firm's management...

answer

question

Waste Management Services, LLC, is a member-managed limited liability company. If the law in Waste's state is like the law in most states, unless the members have agreed otherwise, voting rights are apportioned according to...

answer

(a) capital contributions

question

Cookie Kiosk LLC's members and managers are Dwight, Emma, and Fawn. After Dwight's relationship to Cookie Kiosk ends, Emma and Fawn agree to discontinue the firm's business. This is most likely...

answer

(b) optional

question

Flip is a member of Great States Trucking LLC. Flip's relationship to Great States ends, but the firm continues to do business. This is...

answer

(a) dissociation

question

Build-Rite Construction Corporation and Deals-R-Us, Inc., combine their efforts to build an office and retail complex. Their form of business organization is...

answer

question

Omega Corporation and Precision Coding, Inc., two software firms, wish to combine their research and development capabilities to make a special, limited edition computer game. The most appropriate legal entity for this project might be...

answer

question

Ray, Sully, and Toma form a syndicate to buy a professional football team. This syndicate could be set up as...

answer

(b) a corporation or a partnership

question

Loni, Michel, and Nita are investors in Oceanic Exploration, a busi¬ness trust. A business trust is managed by its...

answer

(d) trustees

question

Jen, Carlo, and other consumers form Metro Purchasing Cooperative. This form of business organization makes it possible for these individuals to...

answer

(d) pool their resources to gain an advantage in the market

question

Drew is a beneficiary of a business trust. As a beneficiary, Drew is required to...

answer

(d) neither distribute the profits nor manage the property

question

As the beneficiary of a business trust, Kevin's liability for trust debts and obligations is...

answer

question

Elmo is the owner and manager of a business trust. Under the terms of a business trust, Elmo is required to...

answer

(a) distribute the profits and manage the property

question

Fab is the owner and manager of a business trust. Gilly is the benefici¬ary. Responsibility for the debts and obligations of the trust rest with...

answer

(b) Fab only

question

Consumers in Delta City form a business organization to provide, without profit, an economic service to its members. This is...

answer

(b) a cooperative

question

Exotic Stuff Company and First Pier, Inc., form a business organization to engage in importing and exporting. Its property is held in the names of the members and its shareholders have personal liability. This business organization is...

answer

(b) a joint stock company

question

Owen, Paula, Quinn, and Rita combine to finance the building of Super Stores, a shopping mall. Their selected form of business organization is an investment group, or...

answer

(d) a syndicate

question

Dreem Land Corporation and EZ Investments Company transfer their property to Financial Managers, Inc., which manages the property and distributes the profits to Dreem and EZ. This form of a business organization is...

answer

(a) a business trust

question

National Capital Corporation and International Investments, Inc., form a joint stock company. The ownership of a joint stock company is represented by...

answer

(b) shares of stock

question

Neverend Music Company and Monotonous Metronome Corporation form a joint stock company. A joint stock company can be formed for, at the most...

answer

(b) a perpetual existence

question

Big Valu Grocery Stores is an unincorporated cooperative. Big Valu and other unincorporated cooperatives are generally treated like...

answer

(d) partnerships

question

Buyers Club is an incorporated cooperative. Like other incorporated cooperatives, Buyers Club distributes profits to its owners on the basis of...

answer

question

Vela and other farmers in Washington County form a business organization to provide, without profit, an economic service to its members. This is...

answer

(b) a cooperative

STUDY

Business Law Business Management Debts And Obligations Federal Trade Commission Terms And Conditions

Business Law Ch 40 Terms – Flashcards 40 terms

Alexandra Robertson

40 terms

Preview

Business Law Ch 40 Terms – Flashcards

question

Licensing

answer

permits one business to use another business's trademarks, service marks, trade names, and other intellectual property in selling goods and services.

question

Joint Venture

answer

allows two or more businesses to combine their resources to pursue a single project or transaction

question

Strategic Alliances

answer

used to enter foreign markets

question

Franchise

answer

established when one party (franchisor, or licensor) licenses another party (the franchisee, or licensee) to use the franchisor's trade name, trademarks, commercial symbols, patents, copyrights, and other property in the distribution and selling of goods and services. generally, franchisor and franchisee are established as separate corporations

question

4 Basic Forms of Franchises

answer

1) distributorship franchise 2) processing plant franchise 3) chain-style franchise 4) area franchise

question

Distributorship Franchise

answer

franchisor manufactures a product and licenses a retail dealer to distribute a product to the public ex - ford motor company manufactures automobiles and franchises independently owned automobile dealers (franchisees) to sell them to the public

question

Processing Plant Franchise

answer

franchisor provides a secret formula or the like to the franchisee. The franchisee then manufactures the product at its own location and distributes it to retail dealers ex - coca-cola corporation, which owns secret formulas for making Coca-Cola and other soft drinks, licenses regional bottling companies to manufacture and distribute soft drinks under the "Coca-Cola" name and other brand names

question

Chain-Style Franchise

answer

franchisor licenses the franchisee to make and sell its products or services to the public from a retail outlet serving an exclusive geographical territory. The product is made or the service provided by the franchise. Most fast-food franchises use this form ex - pizza hut corporation franchises independently owned restaurant franchises to make and sell pizzas to the public under the "Pizza Hut" name.

question

Area Franchise

answer

franchisor authorizes the franchisee to negotiate and sell franchises on behalf of the franchisor. The area franchisee is called a subfranchisor. An area franchise is granted for a certain designated geographical area, such as state, region, or another agreed-upon area. Area franchises are often used when a franchisor wants to enter a market in another country. ex - if Starbucks wanted to enter the country of Vietnam to operate its coffee shops, it could grant an area franchise to a Vietnamese company, which would then choose the individual franchisees in that country

question

Uniform Franchise Offering Circular (UFOC)

answer

a uniform disclosure document that requires a franchisor to make specific presale disclosures to prospective franchisees. The UFOC and state laws requires a franchisor to make specific presale disclosures to prospective franchisees. Information that must be disclosed includes a description of the franchisor's business, balance sheets, and income statements of the franchisor for the preceding three years, material terms of the franchise agreement, any restrictions on the franchisee's territory, reasons permitted for the termination of the franchise, and other relevant information.

question

FTC Franchise Rule

answer

requires franchisors to make full presale disclosures nationwide to prospective franchisees. FTC does not require the registration of the disclosure document with the FTC prior to its use. The UFOC satisfies both state regulations and the FTC.

question

Disclosure of Sales or Earnings Projections Based on Actual Data

answer

if a franchisor makes sales or earnings projections for a potential franchise location that are based on the actual sales, income, or profit figures of an existing franchise, the franchisor must disclose the following: - number and % of its actual franchises that have obtained such results - cautionary stmt in at least 12-pt boldface type that reads, "Caution: Some outlets have sold (or earned) this amount. There is no assurance you'll do as well. If you rely upon figures, you must accept the risk of not doing so well"

question

Disclosure of Sales or Earnings Projections based on Hypothetical Data

answer

if franchisor makes sales or earnings projections based on hypothetical examples, franchisor must disclose: - assumptions underlying the estimates -the number and percentage of actual franchises that have obtained such results -cautionary statement, "Caution: Some outlets have sold (or earned) this amount. There is no assurance you'll do as well. If you rely upon figures, you must accept the risk of not doing so well"

question

FTC Notice

answer

a statement required by the FTC to appear in at least 12-point boldface type on the cover of a franchisors required disclosure stmt to prospective franchisees. e.g.- "we haven't checked it out, and don't know if it's correct. Study carefully. Don't rely on it alone... It may be against law.."

question

franchise agreement

answer

sets forth the T&C's of the franchise. although some states permit oral franchise agreements, most have enacted statutes of Frauds that requires franchise agreements to be in writing. to prevent unjust enrichment, courts occasionally enforce oral franchise agreements that violate the Statute of Frauds. A franchise agreement often specifies the total investment that a franchisee must provide in order to be granted the franchise

question

Topics Covered in a Franchise Agreement

answer

-quality control standards -training requirements -covenant not to compete -arbitration clause -other t

question

quality control standards

answer

protect name and reputation, inspections, etc

question

training requirements

answer

franchisees usually required to attend training programs

question

covenant not to compete

answer

prohibit franchisees from competing with the franchisor during a specific time and in a specified area after the termination of the franchise. unreasonable covenants not to compete are void

question

arbitration clause

answer

provides that any claim or controversy arising from the franchise agreement or an alleged breach thereof is subject to arbitration. U.S. Supreme Court has held such causes to be enforceable

question

Other T

answer

include restrictions on use of franchisor's trade name, trademarks, logo, etc

question

initial license fee

answer

lump-sum payment for privilege of being granted a franchise

question

royalty fees

answer

fee for the continued use of the franchisor's trade name, property, and assistance that is often computed as a percentage of the franchisee's gross sales. royalty fees are usually paid on a monthly basis

question

assessment fee

answer

fee for such things as advertising and promotional campaigns and administrative costs, billed either as a flat monthly or annual fee or as a percentage of gross sales

question

lease fees

answer

payment for any land or equipment leased from the franchisor, billed either as a flat monthly or annual fee or as a percentage of gross sales or other agreed-upon amount

question

cost of supplies

answer

involves payment for supplies purchased from the franchisor

question

consulting fees and other expenses

answer

monthly or annual fee for having experts from the franchisor help the franchisee to better conduct business

question

trade secrets

answer

product formulas, business plans, models, other ideas. ideas that make a franchise successful but that do not qualify for trademark, patent, or copyright protection

question

unfair competition

answer

misappropriation of a trade secret, holder of the trade secret can sue the offending party for damages and obtain an injunction to prohibit further unauthorized use of the trade secret

question

liability of franchisor and franchisee

answer

franchisor deals with franchisee as an independent contractor. franchisees are liable on their own contracts and are liable for their own torts (negligence). franchisors are liable for their own contracts and torts. Generally, neither party is liable for the contracts or torts of the other ex - McDonalds corp grants a restaurant franchise to Tina Corp. Tina Corp opens the franchise restaurant. One day a customer spills a milkshake on the floor. Employees at the franchise fail to clean up the spilled shake, an hour later, another customer slips on the spilled shake and suffers severe injuries. Injured customer can recover damages from the franchisee, Tina Corp, because it was negligent. It cannot recover damages from the franchisor, McDonalds Corp. ex - suppose that McDonalds Corp, franchisor, grants a franchise to Gion Corp, franchisee. McDonalds enters into a loan agreement with Citibank, it borrows $100M. Gion Corp, franchisee, is not liable on the loan. McDonalds Corp, franchisor and debtor is liable on loan.

question

actual agency

answer

created when a franchisor expressly or implicitly makes a franchise its agent. franchisor is liable for the contracts entered into and torts committed by the franchisee while the franchisee is acting within the scope of the agency. franchisors very seldom appoint franchisees as their agents

question

apparent agency

answer

created when a franchisor leads a third person into believing that the franchisee is its agent. for example, a franchisor and franchisee who use the same trade name and trademarks and make no effort to inform the public of their separate legal status may find themselves in such a situation. however, mere the use of the same name does not automatically make a franchisor liable for the franchisee's actions. the court's decision of whether an apparent agency has been creaetd depends on the facts and circumstances of the case

question

for cause

answer

most franchise agreements permit a franchisor to terminate the franchise for this. ex - continued failure of a franchisee to pay franchise fees or meet legitimate quality control stanards would be deemed just cause

question

wrongful termination

answer

unreasonably strict application of a just cause termination clause. a single failure to meet a quality control standard, for example, is not cause of termination

question

breach of a franchise agreement

answer

aggrieved party can sue the breaching party for rescission of the agreement, restitution, and damages

question

licensing

answer

when one business or party that owns trademarks, service marks, trade names, and other intellectual property (licensor) contracts to permit another business or party (licensee) to use its trademarks, service marks, trade names, and other intellectual property in the distribution of goods, services, software, and digital information. ex - walt disney company owns merchandising rights to winnie the pooh stories and all characters associated. disney enters into an agreement whereby it permits the beijing merchandising company, bus under chinese law, to manuf and distribute a line of clothes, toys, and other items bearing likeness of winnie the pooh characters. this is a license

question

joint venture

answer

arrangement in which two or more business entites combine their resources to pursue a single project or transaction. resemble partnerships, except that partnerships are usually formed to pursue ongoing business ops rather than to focus on a single project or transaction. joint ventures have equal rights to manage a joint venture. joint venturers owe each other the fiduciary duties and loyalty and care. if a joint venturer violates these duties. it is liable for the damages the breach causes

question

joint venture partnership

answer

when a joint venture is operated as a partnership. ex - new oil filed is discovered in northern canada. chevron and conoco would each like to drill for oil but neither has sufficient resources to do it alone. they join together to form a joint venture partnership and contributes $100M each of capital to joint venture. if joint venture fails and owes $1B to creditors, are each responsible for joint venture's unpaid debts and obligations.

question

joint venture corporation

answer

joint ventures often form this to operate the joing venture. joint venturers are shareholders of the joint venture corporation. joint venture corporation is liable for its debts and obligations. joint venturers are liable for the debts and obligations of the joint venture corporation only up to their capital contributions to the joint venture corporation ex - chevron and conoco form a 3rd corp called canada oil to operate joint venture. chevron and conoco each contribute $100M to canada oil and each becomes a shareholder oc canada oil. if joint venture fails and canaada oil owes $1B to creditors, which it cannot pay, chevron and conoco each loses its $100M capital contribution but is is not liable for any further unpaid debts or obligations of canada oil

question

strategic alliance

answer

arrangement between 2 or more companies in the same industry in which they agree to ally themselves to accomplish a designated objective. a strategic alliance allows the companies to reduce risks, share costs, combine technologies, and extend their markets. for example, companies often enter into strategic alliances when they decide to expand internationally into foreign countries. strategic alliances do not have the same protection as mergers, joint ventures, or franchising, and sometimes they are dismantled. consideration must always be given to the fact that a strategic alliance partner is also a potential competitor

STUDY

Business Law Debts And Obligations Legal Management Limited Liability Partnership

Business Organizations – General Partnerships/pgs. 682-691 – Flashcards 43 terms

Collin Foley

43 terms

Preview

Business Organizations – General Partnerships/pgs. 682-691 – Flashcards

question

General Partnership (Ordinary Partnership)

answer

An association of two or more persons to carry on as co-owners of a business for profit [UPA Section 6(1)]

question

general partners (partners)

answer

persons liable for the debts and obligations of a general partnership

question

Uniform Partnership Act (UPA)

answer

a model act that codifies partnership law. most states have adopted this in whole or in part.

question

criteria to qualify as a general partnership

answer

It must be: 1. an association of two or more persons 2. carrying on a business 3. as co-owners 4. for profit

question

the most important factor in determining co-ownership of a business

answer

whether the parties share the business's profits and management responsibility

question

prima facie evidence of a general partnership

answer

receipt of a share of business profits

question

no inference of the existence of a general partnership is drawn if profits are received in payment of any of these:

answer

1. a debt owed to a creditor in installments or otherwise, 2. wages owed to an employee, 3. rent owed to a landlord, 4. an annuity owed to a widow, widower or representative of a deceased partner, 5. interest owed on a loan, or 6. consideration for the sale of goodwill of a business

question

general partnership

answer

-can operate under the names of any one or more of the partners or under a fictitious business name. -must file a fictitious business name statement (d.b.a.) -must publish a notice of the use of the trade name in a newspaper of general circulation where it does business -name cannot indicate that it is a corporation (cannot use "inc.") -name cannot be similar to the name used by existing business entity

question

general partnership agreement (articles of general partnership or articles of partnership)

answer

a written agreement that partners sign to form this.

question

general partnerships that exist for more than one year or are authorized to deal in real estate

answer

must be in writing under the Statute of Frauds.

question

General partnerships

answer

do not pay federal income taxes

question

flow-through taxation

answer

the income and losses of partnership flow onto and have to be reported on the individual partners' personal income tax returns.

question

right to participate in management

answer

a situation in which, unless otherwise agreed, each partner has a right to participate in the management of a partnership and has an equal vote on partnership matters.

question

right to share in profits

answer

mandated by UPA, a general partner has right to share in earnings from the investment of capital.

question

sharing of profits and losses

answer

--when partnership agreement provides for the sharing of profits but is silent as to how losses are to be shared, losses are shared in same proportion as profits. --If partnership agreement provides for sharing of losses but is silent as to how profits are to be shared, profits are shared equally.

question

right to compensation

answer

UPA provides that no general partner is entitled to remuneration for performance in the partnership's business. Partners are not entitled to receive salary for providing services to the partnership unless agreed to by partners.

question

right to indemnification

answer

a general partner is entitled to reimbursement for expenditures that are reasonably incurred in the ordinary and proper conduct of business.

question

right to return of loans

answer

a partner who makes a loan to the partnership becomes a creditor of the partnership. He is entitled to loan repayment with interest. (subordinated to claims of creditors who are not partners.)

question

right to return of capital

answer

termination of partnership, partners are entitled to return of capital contributions.

question

right to information

answer

each general partner has the right to demand true and full information from any other partner of all things affecting the partnership. other partners have duty to provide this information

question

Duties of General Partners

answer

Duty of Loyalty Duty of Care Duty to Inform Duty of Obedience

question

Duty of Loyalty

answer

a duty that a partner owes not to act adversely to the interests of the partnership

question

Duty of Care

answer

The obligation partners owe to use the same level of care and skill that a reasonable person in the same position would use in the same circumstances. A breach of this duty is negligence.

question

Duty to Inform

answer

a duty a partner owes to inform his or her co-partners of all information he or she possesses that is relevant to the affairs of the partnership.

question

Duty of obedience

answer

a duty that requires partners to adhere to the provisions of the partnership agreement and the decisions of the partnership.

question

action for an accounting

answer

a formal judicial proceeding in which the court is authorized to 1. review the partnership and the partners' transactions and 2. award each partner his share of the partnership assets This results in a money judgment for or against partners according to the balance struck.

question

unlimited personal liability of a general partner

answer

a general partner's personal liability for the debts and obligations of the general partnership. partners have personal liability for the torts and contracts of the partnership.

question

joint and several liability

answer

tort liability of partners together and individually. A plaintiff can sue one or more partners separately. If successful, the plaintiff can recover the entire amount of the judgment from any or all of the defendant-partners who have been found liable.

question

joint liability (contract liability)

answer

liability of partners for contracts and debts of the partnership. A plaintiff must name the partnership and all of the partners as defendants in a lawsuit

question

liability incoming partners

answer

a new partner is liable for the existing debts and obligations (antecedent debts) of the partnership to the extent of his capital contributions. the incoming partner is liable for debts and obligations incurred by the partnership after becoming a partner.

question

liability of outgoing partners

answer

if general partnership is dissolved, each general partner is personally liable for debts and obligations of the partnership that exist at the time of dissolution. If general partnership is dissolved because a partner leaves the partnership and the partnership is continued by remaining partners, the outgoing partner is liable for the debts and obligations of the partnership at the time of dissolution, but not for new debts/obligations incurred after dissolution, as long as proper notification of his withdrawal is given to the creditor.,

question

partnership for a term

answer

a partnership created for a fixed duration

question

partnership at will

answer

a partnership created with no fixed duration.

question

dissolution

answer

the change in the relationship of partners in a partnership caused by any partner ceasing to be associated in the carrying on of the business

question

winding up

answer

the process of liquidating a partner's assets and distributing the proceeds to satisfy claims against the partnership. follows its dissolution

question

wrongful dissolution

answer

a situation in which a partner withdraws from a partnership without having the right to do so at that time. the partner is liable for damages causes by the wrongful dissolution of the partnership.

question

notice of dissolution

answer

dissolution of a partnership terminates the partners' actual authority to enter into contracts or otherwise act on behalf of the partnership. Notice of Dissolution must be given to certain third parties.

question

actual notice

answer

third parties who have actually dealt with the partnership must be given actual notice (verbal or written) of dissolution or have acquired knowledge of dissolution from another source.

question

constructive notice

answer

third parties who have not dealt with the partnership but have knowledge of it must be given either actual or constructive notice of dissolution. this consists of publishing a notice of dissolution in a newspaper of general circulation serving the area where the business of the partnership was regularly conducted.

question

third parties

answer

third parties who have not dealt with the partnership and do not have kinowlefge of it do not have to be given notice.

question

apparent authority

answer

question

distribution of assets.

answer

question

continuation of general partnership after dissolution

answer

STUDY

Articles Of Organization Business Law Debts And Obligations Legal Management Limited Liability Companies Limited Liability Company Uniform Partnership Act

Bus Law Ch. 38 – Flashcards 40 terms

Robert May

40 terms

Preview

Bus Law Ch. 38 – Flashcards

question

The law governing limited liability companies is uniform.

answer

False

question

Members of limited liability companies are shielded from personal liability in many situations.

answer

True

question

The alter-ego theory can be applied to a corporation, but not a limited liability company.

answer

False

question

Limited liability companies are entities apart from their owners.

answer

True

question

A limited liability company can be taxed as a partnership.

answer

True

question

A limited liability company is a citizen of every state of which their members are citizens.

answer

True

question

A limited liability company can be held liable for any loss or injury caused by the wrongful acts or omissions of its members.

answer

True

question

Unless a limited liability company indicates otherwise, the Internal Revenue Service automatically taxes it as a partnership.

answer

True

question

For federal income tax purposes, one-member limited liability companies are not taxed.

answer

False

question

Most states apply to a limited liability company (LLC) formed in another state the law of the state where the LLC was formed.

answer

True

question

A limited liability company must be managed by nonmembers.

answer

False

question

Limited liability company operating agreements typically contain provisions relating to management.

answer

True

question

If a limited liability company (LLC) agreement does not cover a topic, the state LLC statute will govern.

answer

True

question

A member of a limited liability company (LLC) has the power and the right to dissociate from the LLC at any time.

answer

False

question

Generally, a dissociated member of a limited liability company (LLC) has the right to buy his or her interest in the LLC from the other members.

answer

False

question

If a member's dissociation from a limited liability company is rightful, normally the dissociated member has the right to force the LLC to dissolve.

answer

False

question

Most courts apply the same principles to joint ventures as they apply to partnerships.

answer

True

question

A joint stock company is generally treated as a partnership.

answer

True

question

The law considers all new, single-owner businesses to be sole proprietorships unless the owner affirmatively adopts some other form.

answer

True

question

Limited personal liability obviates the need to obtain for insurance for significant business liability risks.

answer

False

question

Coco is considering forms of business organization for her concessions business—Coco's Cakes. Most states require that a limited liability company have

answer

At least one member

question

Bee Hive Honey, LLC's members include Chad, Dolores, and others. For purposes of suing and being sued, Bee Hive Honey is

answer

A legal entity apart from the owners

question

Otto is considering forms of business organization for Pro Tree Service, his landscaping firm. Like most states, Otto's state requires that to form a limited liabil¬ity company, he must file with a central state agency

answer

Articles of organization

question

Custom Auto Body & Detailing, LLC, is a limited liability company. Unless indi¬cated otherwise on the Custom Auto's federal tax form, the firm will be taxed as

answer

A partnership

question

Location! Realty LLC is a limited liability company. Like other LLCs, for federal jurisdictional purposes, Location! Realty is most likely a citizen of

answer

Every state in which its members are citizens

question

Business Enterprise Company agrees to sell a commercial office building and parking garage to City Investments, Inc., which assigns the rights to the realty to Downtown Properties, LLC. Downtown Properties does not yet exist, but once it is created and comes into existence, the contract on novation will most likely be

answer

Enforceable

question

Qatar Global Investments is a foreign entity—a firm owned and operated by investors in a foreign country. With respect to a limited liability company in the United States, Qatar Global can

answer

become a member

question

Arnie is a member of Bowling & Billiards, LLC, a limited liability company. Arnie can participate in the firm's management

answer

to any extent

question

StartUp Investors, LLC, is a limited liability company without a written operating agreement. Among the mem¬bers, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be

answer

divided equally among the members

question

Dairy Products, Inc., and Eden Farms Corporation form a joint venture to make and test-market Frosty Ice Cream. A joint ven¬ture is usually formed for

answer

A single transaction or project

question

Rafaela Art Gallery and Sequoia Exhibitions form a joint venture. When a dispute arises, Rafaela files a suit against Sequoia. The court is most likely to apply the same principles to this joint venture as it applies to

answer

Partnerships

question

Oni's Adventure Travel and Paquito's Wild River Tours form a joint venture. Oni can participate in the venture's management

answer

To any extent

question

Lauren, Marcella, and Norell form a syndicate to buy a professional soccer franchise. This syndicate could be set up as

answer

a corporation

question

Transworld Import Company and USA Export, Inc., form a business organiza-tion to engage in importing and exporting. Its property is held in the names of the members and its shareholders have personal liability. This or¬ganization is

answer

A joint stock company

question

As the beneficiary of a business trust, Kevin's liability for trust debts and obligations is

answer

nothing

question

answer

A business trust

question

Gabriella is a beneficiary of a business trust. As a beneficiary, she is required to

answer

None of these choices

question

As the trustee of a business trust, Bertoldi is required to

answer

distribute the trust's profits

question

Kalin, Liza, and other consumers form MuniMart Cooperative. This form of business organization makes it possible for these individuals to

answer

pool their resources to gain an advantage in the marketplace

question

Medical Professionals Supply Source is an unincorporated cooperative. Unincorporated cooperatives are often treated like

answer

partnerships

STUDY

Business Law Debts And Obligations Emphasize The Importance Of Joint And Several Liability Legal Management

Chapter 10: Business Organizations – Flashcards 65 terms

Amari Finch

65 terms

Preview

Chapter 10: Business Organizations – Flashcards

question

An _____ is by the definition one who initiates and assumes the financial risks of a new enterprise and undertakes to provide or control its management.

answer

entrepreneur

question

The simplest form of business organization, in which the owner is the business.

answer

Sole Proprietorship

question

Thus, anyone who does business without creating a separate business organization, such as a partnership or corporation, has a _____.

answer

sole proprietorship

question

More than ___ of all U.S. businesses are sole proprietorships. They are usually small enterprises with revenues of less than __ per year.

answer

two-thirds /$1 million

question

Any arrangement in which the owner of a trademark, trade name, or copyright licenses another to use that trademark, trade name, or copyright in the selling of goods or services.

answer

Franchise

question

One receiving a license to use another's (the franchisors) trademark, trade name, or copyright in the sale of goods and services.

answer

Franchisee

question

One licensing another (the franchisee) to use the owners trademark, trade name, or copyright in the selling of goods and services.

answer

Franchisor

question

A _____ arises when a manufacturing concern (franchisor) licenses a dealer (franchisee) to sell its product. Example: car dealership

answer

Distributorship

question

In ____, such as a burger king restaurant or Hilton hotel, a franchise operates under a franchisors trade name and is identified as a member of a select group of dealers that engage in the franchisor's business.

answer

Chain-style business operation

question

In a ______ , the franchisor transmits to the franchisee the essential ingredients or formula to make a particular product.

answer

Manufacturing or processing plant arrangement

question

The ___ ___ specifies the terms and conditions of the franchise and spells out the rights and duties of the franchisor and the franchisee.

answer

franchise contract

question

The franchisee ordinarily pays an __ or __ price for the franchise license. This fee is separate from the various products that the franchisee purchases from or through the franchisor.

answer

initial / lump-sum

question

The franchise agreement may specifiywhether the premises for the business must be leased or purchased outright.

answer

Business Premises

question

Typically, the franchisor will determine the territory to be served. Some franchise contracts give the franchisee exclusive rights, or "territorial rights" to a certain geographic area.

answer

Location of the Franchise

question

Although the day-to-day operations of the franchise is normally left to the franchisee, the franchise agreement may provide for the amount of supervision and control agreed on by the parties.

answer

Quality Control by the Franchisor

question

Usually, the franchise agreement will specify that the termination must be "for cause," such as death or disability of the franchisee, insolvency of the franchisee or breach of the franchise agreement. Most franchise contracts provide that notice of termination must be given. If no set time for termination is specified, then a reasonable time, with notice, will be implied.

answer

Termination of the Franchise

question

Because a franchisors termination of a franchise often has adverse consequences for the franchisee, much franchise litigation involves claims of ___.

answer

Wrongful Termination

question

Federal and state laws protect franchisees from the arbitrary or unfair termination of their franchises by the franchisors.

answer

Good Faith and Fair Dealing

question

Traditionally, partnerships have been classified as either ____ or ____.

answer

general partnerships/ limited partnerships

question

___ is designed for professionals who normally do business as partners in a partnership.

answer

Limited liability partnership

question

An agreement by two or more persons to carry on, as co owners, a business for profit.

answer

Partnership

question

A ____ arises from an agreement, express or implied, between two or more persons to carry on a business for profit.

answer

general partnership

question

1. A sharing of profits and losses. 2. A joint ownership of the business. 3. An equal right in the management of the business.

answer

3 essential elements to a partnership

question

No particular form of partnership agreement is necessary for the creation of a partnership, but for practical reasons, the partnership agreement should be in ____.

answer

writing

question

A written agreement that sets forth each partners rights in, and obligations to, the partnership.

answer

Articles of Partnership

question

A key advantage of the partnership is that the firm itself does not _____.

answer

pay federal income taxes

question

The main disadvantage of the partnership is that the partners are subject to ____ liability for partnership obligations.

answer

personal

question

A doctrine under which a plaintiff may sue, and collect judgement from, any of several jointly liable defendants.

answer

Joint and Several Liability

question

Additionally, a partner who commits a tort that results in a judgement against the partnership may be required to repay the firm for any damages it pays.

answer

...

question

A relationship founded on trust and confidence

answer

Fiduciary Relationship

question

1. A partners duty of loyalty has two aspects. A partner must account to the partnership for any profit or benefit from the firm's business or the use of its property. A partner must also refrain from dealing with the firm as an adverse party or competing with it. 2. A partners duty of care is limited to refraining from negligent or reckless conduct, intentional misconduct, and violations of the law.

answer

Fiduciary Duties

question

A partnership consisting of one or more general partners and one or more limited partners.

answer

Limited Partnership

question

A limited partnership is a creature of statute, because it does not come into existence until a _____ is filed with the appropriate state office.

answer

certificate of limited partnership

question

A partner who assumes responsibilty for the management of the partnership and liability for its debts.

answer

General Partner

question

A partner who contributes capital to the partnership but has no right to participate in the management or operation of the business and assumes no liability for partnership beyond the capital contributed.

answer

Limited Partner

question

One of the major benefits of becoming a limited partner is this ______.

answer

limitation on liability

question

A form of partnership that allows professionals to enjoy tax benefits of a partnership while limiting their personal liability for the malpractice of other partners.

answer

Limited Liability Partnership (LLP)

question

The major advantage of the LLP is that it allows a partnership to continue as a ____ for tax purposes, but limits the liability of partners.

answer

pass-through entity

question

A major disadvantage of the general partnership is the _____ of its owner-partners.

answer

unlimited personal liability

question

A hybrid form of business enterprise that offers the limited liability of the corporation but the tax advantages of a partnership.

answer

Limited Liability Company (LLC)

question

This business form is governed by the state ____.

answer

LLC statutes

question

A person who has an ownership interest in a limited liability company.

answer

Member

question

The document filed with a designated state official by which a limited liability company is formed.

answer

Articles of Organization

question

To form an LLC, articles of organization must be filed with a ____ agency --- usually the _____ office.

answer

State/ secretary of state's

question

The business's name must include the words "Limited Liability Company" or the initials "LLC"

answer

...

question

A key advantage of the LLC is that the liability of members is limited to the amount of their ____.

answer

investments

question

An LLC that has _____ can choose to be taxed either as a partnership or as a corporation.

answer

two or more members

question

In a limited liability company, an agreement in which the members set forth the details of how the business will be managed and operated.

answer

Operating Agreement

question

There are two options for managing an LLC:

answer

member-managed/manager-managed

question

A legal business form that complies with statutory requirements.

answer

Corporation

question

Corporations are owned by:

answer

Shareholders

question

The corporations existence as a legal entity, which can be perpetual, depends generally on ____.

answer

state law

question

One of the key advantages of the corporate form of business is that the liability of its owners (shareholders) is limited to their ___.

answer

investments

question

The corporate entity pays taxes on the firms ____, and when income is distributed to shareholders, the shareholders again pay taxes on that income.

answer

income

question

A business corporation that qualifies for special income tax treatment.

answer

S Corporation

question

As in a partnership, the income is taxed only ___.

answer

once

question

The document filed with the appropriate governmental agency, usually the secretary of state, when a business is incorporated.

answer

Articles of Incorporation

question

A set of governing rules adopted by a corporation or other association

answer

Bylaws

question

Corporations can do one of two things with corporate profits: retain them or pass them on to shareholders in the form of ____.

answer

dividends

question

A distribution to corporate shareholders of corporate profits or income, disbursed in proportion to number shares held.

answer

Dividend

question

Another import aspect of corporate taxation is that corporate profits can be subject to ____.

answer

double taxation

question

The proportion of a corporations profits that has not been paid out as dividends to shareholders.

answer

Retained Earnings

question

It also has the right of due process before denial of life, liberty, or property, as well as freedom from unreasonable searches and seizures and from double jeopardy.

answer

Constitutional Rights of Corporations

question

One of the hallmarks of the corporate organizations is that shareholders are not personally liable for the debts of the corporation.

answer

Liabilities of Shareholders

question

Bonus: To disregard the corporate entity and hold the shareholders personally liable for a corporate obligation.

answer

Pierce the Corporate Veil

STUDY

Business Debts And Obligations Economics Legal Management Long Term Bonds Uniform Partnership Act

Chapter 8 Free Enterprise – Flashcards 50 terms

Brooke Sharp

50 terms

Preview

Chapter 8 Free Enterprise – Flashcards

question

What is the most common form of a business organization in the US?

answer

Sole Proprietorships

question

What percentage of all businesses in the US are sole proprietorships, according to the IRS?

answer

75%

question

Are most sole proprietorships large, medium, or small in size of revenue generation? What percentage of US sales do sole proprietorships generate?

answer

Small- only 6%

question

What is the most popular type of firm in the US?

answer

Sole Proprietorship

question

Is a sole proprietorship easy to establish?

answer

Yes

question

__ __-__ is one of the main advantages of a sole proprietorship.

answer

Easy Start-up

question

Just about anyone can start a sole proprietorship if your are willing to complete a small amount of __ and pay the __ expense to start the business.

answer

Paperwork, legal

question

The paperwork only takes a __ or __ to complete.

answer

Day, two

question

Sole proprietorships typically must meet three minimum requirements:

answer

Authorization (business license), site permit, name of business

question

What form of business is the least regulated?

answer

Sole Proprietorship

question

Name two kinds of regulations that a sole proprietorship might subject to follow:

answer

Health codes, zoning laws

question

Who gets to keep all of the profits (after taxes) in a sole proprietorship?

answer

The owner of the business

question

How does the ability to make fast, flexible decisions benfit a sole proprietor?

answer

It allows them to take full advantage of sudden opportunities

question

If a sole proprietor wants to discontinue their business, they must first: a) pay any __ b) any other obligations like __

answer

debts, taxes

question

List three major disadvantages of sole proprietorships:

answer

Unlimited personal liability, limited access to resources, lack of permanence

question

an estaqblishment formed to carry on commercial enterprise

answer

Business organization

question

a business owned and managed by a single individual

answer

sole proprietorship

question

authorization to start a business issued by the local government

answer

business license

question

law in a city or town that designates separate areas for residency and for business

answer

zoning laws

question

the legally bound obligation to pay any debts

answer

liability

question

payment other than wages or salaries

answer

fringe benefit

question

a business owned by two or more persons who agree on a specific division of responsibilities and profits

answer

partnership

question

partnership in which partners share equally in both responsibility and liability

answer

general partnership

question

partnership in which only one partner is required to be a general partner

answer

limited partnership

question

partnership in which all partners are limited partners

answer

Limited Liability Partnership (LLP)

question

a partnership agreement

answer

articles of partnership

question

act ordering common ownership interests, profit and loss sharing, and shared management responsibilities in a partnership

answer

Uniform partnership act (UPA)

question

money and other valuables belonging to an individual or business

answer

assets

question

a legal entity owned by individual stockholders

answer

corporation

question

a certificate of ownership in a corporation

answer

stock

question

a formal contract to repay borrowed money with interest at fixed intervals

answer

bond

question

the portion of corporate profits paid out to stockholders

answer

dividend

question

the combination of two or more firms involved in different stages of producing the same good or service

answer

vertical merger

question

share of earnings given as a payment

answer

royalties

question

retail outlet owned and operated by consumers

answer

consumer cooperative

question

cooperative that provides a service, rather than a good

answer

service cooperative

question

agricultural marketing cooperative that helps members sell their products

answer

producer cooperative

question

institution that functions much like a business, but does not operate for the purpose of generating profits

answer

nonprofit organization

question

nonprofit organization that works to improve the image, working conditions, and skill levels of people in particular occupations

answer

professional organization

question

nonprofit organization that promotes collective business interests for a city, state, or other geographical area, or for a group of similar businesses

answer

business association

question

nonprofit organzation that promotes the interests of a particular industry

answer

trade association

question

Partnerships agree on a specific __ of __ and __.

answer

division, responsbility, profits

question

In the US, partnerships account for about __ percent of all business.

answer

question

Partnerships generate about __ percent of all sale and about __ percent of all income

answer

5, 10

question

What is the most common type of partnership?

answer

General Partnership

question

In a limited liability partnership __ partners are limited partners.

answer

all

question

What are the four most common types of LLPs?

answer

Attorneys, physicians, dentists, accountants

question

Limited liability partners are not usuall liable for other partner's __.

answer

Mistakes

question

How does a corporation differ from a sole proprietorship or partnership?

answer

Corporations continue after the death of their owners and are owned by shareholders

question

How does a business franchise work?

answer

It pays fees to a parent company in order to sell its goods in a specific area

STUDY

Business Debts And Obligations Models Product Design Separate Legal Entity Skills And Abilities Strengths And Weaknesses

EEE Final – Flashcards 128 terms

Will Walter

128 terms

Preview

EEE Final – Flashcards

question

What does a business model represent?

answer

The core aspects of a business and how they fit together.

question

Standard Business Model

answer

Depict existing plans firms can use to determine how they will create, deliver and capture value for their stakeholders.

question

Disruptive Business Model

answer

Business Models that don't fit the profile of a standard business models, and are impactful enough that they disrupt or change the way business is conducted in an industry or an important niche within the industry

question

New Market Disruption

answer

Addresses a market that previously wasn't served

question

Low-End Market Disruption

answer

Disrupts market by providing a simple "low cost" alternative to incumbent businesses

question

Core Strategy (1st component of Barringer/Ireland Business Model Template)

answer

Describes how the firm plans to compete relative to its competitors

question

Primary elements of Core Strategy

answer

- Business mission - Basis of Differentiation - Target Market - Product/Market Scope

question

Business Mission

answer

A business mission or mission statement describes why it exists and what its Business Model is supposed to accomplish.

question

Basis of Differentiation

answer

Why consumers pick one company's products over another's.

question

Target Market

answer

A place within a larger market segment that represents a narrow group of customers with similar interests.

question

Product/Market Scope

answer

Defines the products and markets on which a company will concentrate on. (Most firms start with a narrow scope and become larger).

question

Resources (2nd component of Barringer/Ireland Business Model Template)

answer

The inputs a firm uses to produce, sell, distribute, and service a product or service. A firms most important resources must be difficult to imitate and hard to find a substitute for.

question

Core Competencies (resources)

answer

A specific factor or capability that supports a firm's business model and sets it apart from rivals. (technical know-how, efficient process, trusting relationship with customers, expertise in product design)

question

Key Assets

answer

The assets that a firm owns that enable its Business Model to work. (physical-equipment, financial-investors, intellectual-trademarks, or human-employees)

question

Financials (3rd component of Barringer/Ireland Business Model Template)

answer

Only section of a firm's Business Model that describes how it earns money.

question

Revenue Streams

answer

Describes the ways in which a firm makes money, can be single or have several.

question

Cost Structure

answer

Describes the most important costs incurred to support its Business Model

question

Goal of Cost Structure

answer

Identify: -cost-driven or value-driven -nature of business's costs - business's major cost categories

question

Financing/Funding

answer

Indicate the appropriate amount of funding that will be needed and where the money will come from. Approximation is sufficient in the Business Model stage, don't need an exact amount.

question

3 categories of costs to consider

answer

1. Capital costs 2. One-time expenses 3. Provisions for ramp up expenses

question

Operations (4th component of Barringer/Ireland Business Model Template)

answer

Integral to a firm's overall Business Model and represent the day-to-day heartbeat of a firm.

question

Product (or service) Production

answer

How products/services are produced. Manufactured or in-house produced

question

Channels

answer

How the product/service is delivered to customers

question

Key Partners

answer

Final element of a business model If a start-up firm doesn't have sufficient resources or funding to perform all the tasks to make the Business Model work, they rely on key partners to perform important roles.

question

Types of Business Partnerships

answer

- Joint Venture - Network - Consortia - Strategic alliance

question

What is Entrepreneurship?

answer

"The pursuit of opportunity without regard to the resources currently controlled"

question

Entrepreneurial Mindset

answer

The fixed set of attitudes, dispositions and traits that positively incline a person to think, act and behave in an entrepreneurially manner and predetermines a person's response to and interpretation of various situations

question

How firms behave in an Entrepreneurial Mindset

answer

All firms fall on a conceptual continuum that ranges from highly conservative to highly entrepreneurial- a firms position on the continuum is its "entrepreneurial intensity"

question

Entrepreneurial Firms

answer

Are proactive, innovative, and risk taking

question

New venture startup process

answer

1. Decision to become an entrepreneur 2. Developing successful business ideas 3. Moving from an idea to an entrepreneurial firm 4. Managing and growing the entrepreneurial firm

question

What Prevents people from behaving in an entrepreneurial manner?

answer

Hierarchical structures where failure is frowned upon there is a misconception that there is no need for hard work, and society is becoming less risk taking

question

Outcomes of Entrepreneurial Process

answer

Creativity Opportunity recognition Responsible risk taking Self awareness

question

Where do opportunities come from?

answer

- Changing environmental trends - Solving Problems - Filling gaps in the marketplace

question

Changing Environmental Trends

answer

ex: aging of population, increasing diversity, social network participation increasing, growth in use of mobile devices, more focus on health and wellness

question

Solving a Problem

answer

by observing the challenges that people experience in their daily lives. OR through more simple means, such as intution, or chance

question

Finding gaps in the Marketplace

answer

Products consumers need or want that aren't available in a particular location or aren't available at all

question

How are opportunities recognized?

answer

Exploring, watching people, asking questions, journal problems and possibilities, be open-minded, be confident

question

What type of risk taker is a business owner?

answer

A "moderate" risk taker. Responsible business owners take well informed calculated risks. See their business as a secondary or acceptable risk in their lives.

question

Endowment Effect

answer

People place a higher value on things they own opposed to equivalent or even superior things they don't own. (Very powerful urge among people to protect what they already possess, even though something of greater value may be within their reach)

question

Risk Aversion

answer

Refers to the tendency for people to strongly prefer avoiding losses rather than acquiring gains.

question

Factors that help overcoming the fear of risk taking

answer

-aware of emotional reactions -identify particular challengs -recognize traditional thoughts -educate yourself on facts -calculate each risk -practice taking risks

question

Researching the business opportunity

answer

Taking time to learn the ins and outs of an opportunity is largely what makes business owners moderate rather than high risk-takers

question

3 approaches to researching opportunities

answer

1. get advice from experts and informed people 2. gather information about opportunity 3. conduct a feasibility analysis and write a comprehensive business plan

question

How to determine what you want in your life

answer

-look at life holistically -is what you want only satisfied from starting your own business?

question

How to overcome the endowment effect and risk aversion

answer

-determine what you want in your life -having a good sense of "whats the worst thing that can happen if the business fails" -research and test the business idea

question

Joint Venture Business Partnership

answer

2 or more firms

question

Network Business Partnership

answer

hub-and-wheel configuration with a local firm at the hub

question

Consortia Business Partnership

answer

group of organizations with similar needs

question

Strategic alliance Business Partnership

answer

2 or more firms establish exchange relationship

question

3 Phases of the Entrepreneurial Mindset

answer

1. Recognize opportunities 2. Assess opportunities 3. Execute and realize opportunities

question

What are the components of the Barringer/Ireland Business Model Template?

answer

Core strategy resources sales operations

question

Quadrant A of the HBDI Model?

answer

Analytical and logical

question

Quadrant B of the HBDI Model?

answer

organized and planned

question

Quadrant C of the HBDI Model?

answer

sensing and emotional

question

Quadrant D of the HBDI Model?

answer

experimenting and abstract

question

What is a Business Model?

answer

It's the architecture, the frame, the overall view of your business.

question

Cost Driven

answer

leanest cost structure, low price value proposition, maximum automation, extensive outsourcing.

question

Value Driven

answer

focused on value creation, premium value proposition.

question

Opportunity recognition

answer

Important component of the entrepreneurial process. Entrepreneurs are often characterized by their ability to recognize opportunities. The most basic entrepreneurial actions involve the pursuit of opportunity

question

MBTI where you focus your attention

answer

Extraversion or Intraversion

question

MBTI which way you take in information

answer

Sensing or Intuition

question

Sensing

answer

People who tend to take in information through the five senses and focus on the here and now.

question

Intuition

answer

People who tend to take in information from patterns and the big picture and focus on future possibilities

question

Extraversion

answer

People who tend to focus on the outer world of people and activity.

question

Introversion

answer

People who tend to focus on the inner world of ideas and impressions.

question

MBTI which way you make decisions

answer

Thinking or Feeling

question

Thinking

answer

People who make decisions based primarily on logic and on objective analysis of cause and effect.

question

Feeling

answer

People who tend to make decisions based primarily on values and on subjective evaluation of person-centered concerns.

question

MBTI how you deal with the outer world

answer

Judging or Perceiving

question

Judging

answer

People who tend to like a planned and organized approach to life and want to have things settled.

question

Perceiving

answer

People who tend to like a flexible and spontaneous approach to life and want to keep their options open.

question

How to establish a Strong Ethical Culture

answer

Lead by Example Establish a Code of Conduct Implement an Ethics Training Program

question

New Venture Team

answer

Group of founders, key employees, and advisors that move a new venture from an idea to a fully functioning firm.

question

Bootstrapping

answer

Finding ways to avoid the need for external financing or funding through creativity, ingenuity, thriftiness, cost cutting, or any means necessary. Many entrepreneurs bootstrap out of necessity.

question

Venture Capital

answer

Money that is invested by venture capital firms in start-ups and small businesses with exceptional growth potential

question

Vendor Credit

answer

(AKA trade credit) when a vendor extends credit to a business in order to allow the business to buy its products and/or services up front but defer payment until later.

question

Marketing (academic definition)

answer

An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

question

Marketing (practical definition)

answer

Involves motivating (qualified) people to enter your sales funnel, converting prospects to customers, and managing customer and prospect relationships on an ongoing basis

question

Marketing Strategy

answer

A firm's approach to marketing its products and services in broad terms. This approach forms the basis of all its marketing-related activities.

question

Positioning Strategy

answer

After selecting a target market, the next step is for a firm to select a "position" in the market. Position is concerned with how a firm is situated relative to its rivals (or potential rivals). In a sense, a position is the part of a specific target market that a firm is claiming for its own.

question

Key elements of Resources

answer

Core competency Key assets

question

Key elements of Financials

answer

Revenue streams Cost Structure Financing/funding

question

Key Elements of Operations

answer

Product (or service) production Channels Key partnerships

question

What are the four key elements of the entrepreneurial mindset?

answer

Opportunity recognition, creativity, responsible risk taking, self awareness

question

What are the three steps to the entrepreneurial process?

answer

Ability to recognize opportunities, ability to assess opportunities, ability to execute opportunities

question

Where do opportunities come from?

answer

Changing environmental trends, solving problems, filling gaps in the marketplace.

question

What is the entrepreneurial mindset?

answer

The fixed set of attitudes, dispositions and traits that positively incline a person to think, act, and behave in an entrepreunrially manner

question

What is the new venture startup process?

answer

Decision to become an entrepreneur>developing successful business ideas>moving from an idea to an entrepreneurial firm>managing and growing the entrepreneurial firm

question

HBDI Blue- quadrants definition

answer

analytical, rational. Green- planning, organized. Red- sensing, emotional. Yellow- synthesizing, intuitive.

question

HBDI Blue- quadrant strengths

answer

solves or fixes a problem

question

HBDI Red- quadrant strengths

answer

allows group to better improve as a team.

question

HBDI Yellow- quadrant strengths

answer

opens up future possibilities.

question

HBDI Green- quadrant strengths

answer

helps get the task done.

question

HBDI quadrant questions

answer

asks why?

question

HBDI Green- quadrant questions

answer

asks how many or how much?

question

HBDI Red- quadrant questions

answer

asks who and for whom?

question

HBDI Yellow- quadrant questions

answer

asks how and what if?

question

Extrovert characteristics

answer

Outer world, talks

question

Introvert characteristics?

answer

Inner world, quiet

question

Sensing characteristics?

answer

Take in information through the senses and focus on here and now

question

Intuition characteristics?

answer

Information through the big picture and focus on future possibilities

question

Thinking characteristics?

answer

Make decisions based on logic and cause and effect

question

Feeling characteristics?

answer

Make decisions based on values and person-centered concerns

question

Judging characteristics?

answer

Planned and organized approach to life

question

Perceiving characteristics?

answer

Flexible and spontaneous

question

What are the factors of establishing a strong ethical culture?

answer

Lead by example, establish a code of conduct, implement an ethics training program

question

What are the common forms of legal entity?

answer

Sole proprietorship, partnership, corporation, limited liability company

question

What is a new venture team?

answer

A group of founders, key employees, and advisors that move a new venture from an idea to a fully functioning firm

question

Advantages of a venture team?

answer

Teams bring more talent, broader network, and psychological support

question

Disadvantages of a venture team?

answer

Team members may not get along, formal structure may be compromised by "equal" employees

question

What is a skills profile?

answer

A chart that depicts the most important skills that are needed and where skills gaps exist in a new firm

question

What are the three formal responsibilities of the board of directors?

answer

Appoint the officers of the firm, declare dividends, and oversee the affairs of the corporation

question

Why do new ventures need financing?

answer

Cash flow challenges, capital investments, lengthy product development cycles

question

Alternatives for raising money for a new venture?

answer

Personal funds, equity capital, debt financing, creative sources

question

What is bootstrapping?

answer

Finding ways to avoid need for external financing through creativity, cost cutting, thriftiness (buying used equipment)

question

Equity funding vs. debt financing

answer

Equity is exchanging partial ownership in a firm, such as stock, for funding. Debt is getting a loan

question

What is an elevator speech?

answer

Brief, contracted statement that outlines the merits of a business opportunity (2 minute pitch)

question

Sources of equity funding?

answer

Venture capital, business angels, IPOs.

question

What are business angels?

answer

Shark tank

question

What are venture capital firms?

answer

Firms who fund very few start ups who show exceptional growth

question

Sources of debt financing?

answer

Commercial banks, SBA guaranteed loans (guaranteed loan for small businesses who can't get money anywhere else

question

What is marketing?

answer

An organizational function and set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

question

What is marketing (practical definition)?

answer

Motivating qualified people to enter your sales funnel, converting prospects into customers and managing customer and prospect relationships on an ongoing basis

question

What is positioning strategy?

answer

Concerned with how a firm is situated relative to its competitors and what part of the market it is going to be involved in

question

Sections of the BMC?

answer

Core strategy, resources, financials, operations

question

HBDI Green- quadrants definition

answer

planning, organized.

question

HBDI Red- quadrants definition

answer

sensing, emotional.

question

HBDI Yellow- quadrants definition

answer

synthesizing, intuitive.

STUDY

Business Business Management Debts And Obligations Foreign Corrupt Practices Act Limited Liability Partnership Principles Of Marketing

Intro to Business Quiz Questions for Exam 1 – Flashcards 31 terms

Noah Thomson

31 terms

Preview

Intro to Business Quiz Questions for Exam 1 – Flashcards

question

Business will incur a _____ when expenses are higher than revenue

answer

Loss

question

Business transactions that occur online are examples of:

answer

e-commerce

question

Doing business today without harming the ability of future generations to meet their needs is referred to as:

answer

sustainability

question

Nonprofit organizations are not in the business of:

answer

financial gain

question

A product has value when its benefits to the customer are equal to or greater than the price that the customer pays.

answer

True

question

An economic system is a structure for:

answer

allocating limited resources.

question

A market structure with pure competition has all of the following characteristics EXCEPT:

answer

the firms use product differentiation allowing consumers to easily identify their favorite brands.

question

A federal agency called the _____ was established to protect customer deposits in banks and thrift institutions for up to $100,000 per customer, per bank.

answer

Federal Deposit Insurance Corporation (FDIC)

question

A basic characteristic of _____ is that both producers and consumers are free to make their own economic decisions on many basic issues.

answer

capitalism

question

_____ is a period of robust economic growth and high employment indicating that businesses are capitalizing on new market opportunities.

answer

expansion

question

A trade _____ occurs when a country imports more goods and services than it exports.

answer

deficit

question

Foreign _____ involves a firm buying the rights to produce, promote, and use the domestic firm's trademark/patents in a defined geographical area as long as there is an agreement on specific operating procedures.

answer

licensing

question

What is meant by the balance of trade?

answer

It is a measure of the difference between exports and imports.

question

When a country lacks hard currency it must use _____ to complete international trade.

answer

countertrade

question

Which of the following would be an appropriate reason for a country to eliminate trade restrictions?

answer

To increase domestic jobs in industries with a comparative advantage versus other countries

question

Socially responsible employers:

answer

ensure that hard work, commitment, and talent pay off.

question

A _____ is the systematic evaluation of how well a firm is meeting its goals of ethics and social responsibility.

answer

social audit

question

A person who reports illegal or unethical behavior within an organization is known as a:

answer

whistle-blower.

question

Stakeholders are:

answer

groups or individuals with a personal interest in the performance and actions of a business.

question

Which of the following illustrates a true ethical dilemma?

answer

Jack has to cover for his manager who has been stealing from the cash register or else he will lose his job.

question

_____ are by far the most common type of business organization in the United States.

answer

Sole proprietorships

question

A "spin-off" is a common type of _____.

answer

divestiture

question

Cathy and Denise open a business as a limited liability partnership in a state that offers partial-shield protection. From Cathy's perspective, this means that she:

answer

has unlimited liability for most types of debts the firm incurs, but she is protected from any debts that result from Denise's negligence or malpractice.

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Stockholders are _____ of a corporation. Common stockholders have the right to vote on issues affecting the operation of the business.

answer

owners

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The party in a franchise relationship that pays for the right to use resources supplied by another business entity is known as the _____.

answer

franchisee

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_____ are wealthy individuals who invest in new and growing firms.

answer

Angel investors

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A possible drawback when buying an existing business is that:

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you may inherit the mistakes made by the previous owner.

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Entrepreneurs tend to be tolerant of:

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uncertainty; they view business uncertainty as something they can turn to their advantage.

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People with a(n) _____ have a strong sense of personal responsibility for what happens in their lives.

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internal locus of control

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A(n) _____ is a formal document that describes a business concept and outlines the core business objectives while detailing the strategies and timelines for achieving those objectives.

answer

business plan

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A(n) _____ is a formal document that describes a business concept and outlines the core business objectives while detailing the strategies and timelines for achieving those objectives.

answer

business plan

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