Deck 9: The Family Firm Alternative: How Do I Take Over My Familys Business

Question 1

Family businesses can be used to sponsor qualified relatives as immigrants when:

A)the relative is economic distress.
B)when the business cannot find a skilled Canadian for the job.
C)when the relative is required for a position of trust.
D)when quotas for that country have not been filled.

Answer 1

C

Question 2

Customer loyalty is more likely to be retained when there is an abrupt transition of power.

Answer 2

False

Question 3

A second-generation owner of a family business is not a true entrepreneur.

Answer 3

False

Question 4

"Family Business" is not available as a field of study in any major
North American business school.

Question 5

Leading the family business requires a deep involvement with family politics.

Question 6

Which of the following is not a typical family business problem?

A)incompetent family members in positions of responsibility.
B)theft of the assets by family members.
C)battles for control among family members.
D)attempts to use the business as a weapon in family feuds.

Question 7

The key advisors for a retiring business owner are:

A)consultant, lawyer, doctor, insurance agent.
B)financial planner, doctor, real estate agent, lawyer.
C)accountant, financial planner, lawyer, personal advisor.
D)lawyer, doctor, accountant, estate planner.

Question 8

History has shown that family firms are more successful when:

A)the business is seen as a long-term trust of the family.
B)it is seen as disloyal to not work for the business.
C)personal issues are given priority over business issues.
D)all of the above.

Question 9

Creating two classes of shares, only one of which will grow in value is called:

A)probate.
B)estate freeze.
C)bequeathing.
D)share succession.

Question 10

On retirement, the main advisor for a family business owner should be the family member taking over the business.

Question 11

There are no formal educational requirements for taking over a family business.

Question 12

Business owners are most likely to commit to a succession plan when they are in their fifties.

Question 13

Parents generally find it easy to delegate to their offspring.

Question 14

Which of the following is a family business?

A)A woman owns a small garage where her four sons work as mechanics.
B)A man owns a delivery service where the five children of his dispatcher work.
C)A woman is self-employed as a writer and is the only earner in her family.
D)None of the above are family businesses.

Question 15

Family businesses are successfully transferred to the next generation in:

A)ninety percent of all cases.
B)more than two thirds of all cases.
C)less than one third of all cases.
D)less than ten percent of all cases.

Question 16

Siblings close in age and of the same gender are more likely to continue rivalries into adulthood.

Question 17

A well-run family business has:

A)a single family member in control.
B)formal lines of authority.
C)competitive industry pay rates.
D)all of the above.

Question 18

A family council carries the same authority as a board of directors.

Question 19

Which of the following is not one of the plans for retiring business owners?

A)retirement plan.
B)estate plan.
C)succession plan.
D)tax plan.

Question 20

The increase in value of an investment is subject to:

A)capital gain tax.
B)retirement tax.
C)estate tax.
D)probate tax.

Question 21

Explain several basic approaches to reducing conflict within family businesses.

Question 22

Outline the process of planning for retirement and identify the major advisors involved, specifying the roles of each..

Question 23

Discuss the major advantages and disadvantages of a career in the family business..

Question 24

Define the term "family business" and use examples to show that this could cover a wide assortment of ownership and employment arrangements.