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Exam 8: Forms of Business Ownership

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Question 41

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A disadvantage of a partnership is that any partner may have to pay all of the debts of the company regardless of who incurred the debts.

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Question 42

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Distinguish between a merger and an acquisition.

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A merger is a combination of two or more...

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Question 43

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Discuss the following statement "The franchisee has just as much control over his or her business as the sole proprietor."

Isadore Alfonse is considering the purchase of a Bonus Building Care franchise.Alfonse is NOT likely to get assistance from the commercial cleaning franchisor in which of the following areas?

AT&T and British Telecom,two of the largest communications companies in the world,allied to create a company called Concerts to investigate the profitability of providing telecommunications services for multinational companies.Concerts is an example of which of the following?

Which of the following is an advantage of sole proprietor ownership?

When Markum Corp.,a manufacturer of cardboard printing equipment,purchased Pretak Ltd.,a manufacturer of printers for printing on plastic,it was an example of an acquisition.

When Sara Lee,a company known for its baked goods,purchased Dim S.A.,a French hosiery manufacturer,it was an example of a conglomerate merger.

Sole proprietorships experience which of the following tax situations?

For partnerships to be legal,they must be established in writing.

What is the purchaser of a franchise called?

Thom Georges wants to open a store to sell antique architectural features that he can salvage from old houses being torn down.He has an eye for the kind of doors,windows,mantels,and so forth that decorators want,but he does not have all the funding he needs.He has invited his parents to invest $40,000 in the enterprise.He has told them that if they do invest,they would have liabilities in the company equal to but no greater than their investment.Georges is trying to get them to form which of the following?

Karl Metzger plans to invest $5,000 in a partnership with his brother to produce and sell handcrafted violins,zithers,and other string instruments.Metzger does not plan to work in the business and wants no more liability than his investment.What should he be?

Which of the following statements best describes cooperatives?

Locating a Baskin-Robbins and a Burger King franchise under the same roof is an example of tandem-franchising.

EMC,a data storage company,took over a company called Documentation,which makes software designed to help companies organize data such as e-mails,medical records,and spreadsheets.This is an example of which of the following for EMC?

What is the most common form of business organization?

List the three major types of mergers.

Which of the following is created when two or more companies form a special entity to undertake a specific project,usually for a specific period of time?

Aaron Medford has invested $600 in the corporate stock of a manufacturer of offshore oil drilling equipment.If the company goes bankrupt,what is the most Medford could lose?