Question 1

Members are the most important part of a cooperative.

Accepted Answer

Members are the foundation of any cooperative. They are the reason for its existence and contribute to its growth and success. The cooperative exists to serve its members, and their needs and interests are always given top priority. Without members, the cooperative cannot function or achieve its mission. Therefore, members are the most important part of a cooperative.

Question 2

An advantage of S corporations over C corporations is they avoid double taxation.Explain how this works.

Accepted Answer

The answer of An advantage of S corporations over C...

Question 3

Explain what is involved in starting a business as a sole proprietor and the advantages to choosing this form of ownership.

Accepted Answer

The answer of Explain what is involved in starting a...

Question 4

All mergers and acquisitions are mutually desired by both companies.

Accepted Answer

Not all mergers and acquisitions are mutually desired by both companies. Sometimes, one company may initiate the process without the complete agreement of the other.

Question 5

Henry decides to become a member of a limited liability company (LLC).What will happen to the company if Henry withdraws his membership and invests in other businesses?

Accepted Answer

The answer of Henry decides to become a member of...

Question 6

Jose lives in Mexico City and is a Mexican citizen.He has several friends in the United States who own a company.If Jose wanted to invest in the company,why would it matter if the company was an S corporation as opposed to a limited liability company?

Accepted Answer

The answer of Jose lives in Mexico City and is...

Question 7

Sarah,Mike and Mark are dentists who would like to form a partnership.They have decided to form a limited liability corporation.Explain why this is a good choice for their dental practice.

Accepted Answer

The answer of Sarah,Mike and Mark are dentists who would...

Question 8

After a successful five years,Double Z,LLC (a retirement ranch for race horses)thinks it may be able to attract donations from animal activist groups and even the federal government if it becomes a not-for-profit corporation.Explain what changes the owners of Double Z would need to make in order to be a not-for-profit corporation?

Accepted Answer

The answer of After a successful five years,Double Z,LLC (a...

Question 9

As a shareholder of an S corporation,Dave is entitled to a profit proportionate to his interest in the corporation.How would Dave pay his taxes for the profits from his shares in the S corporation?

Accepted Answer

The answer of As a shareholder of an S corporation,Dave...

Question 10

Diane and Julie own a coffee shop.Due to the growing number of customers,they need to hire employees.At the beginning of their partnership it was agreed that Diane would manage human resources.Diane independently interviewed and hired two servers.What makes Diane and Julie's partnership successful in this situation?

Accepted Answer

The answer of Diane and Julie own a coffee shop.Due...

Question 11

Brian establishes a small shoe factory that specializes in custom-made shoes.As a sole proprietor,he is immediately able to set up his business without needing to consult other people to make decisions and establish policies.How would the establishment of policies be different for Brian if he were a board member in a corporation?

Accepted Answer

The answer of Brian establishes a small shoe factory that...

Question 12

What is a C corporation and what are the advantages of this type of business ownership?

Accepted Answer

The answer of What is a C corporation and what...

Question 13

Emily wants to open a chain of sandwich shops and hopes to attract investors to help finance growth.She considered forming a C corporation but wants to have more flexibility about how the new business will be taxed.She also wants to offer investors limited liability.What form of ownership will best meet Emily's objectives?

Accepted Answer

The answer of Emily wants to open a chain of...

Question 14

In order to expand more quickly and remain competitive,companies integrate other established businesses through the process of mergers or acquisitions.

Accepted Answer

Mergers and acquisitions are common strategies used by companies to expand their operations and increase their competitive advantage.

Question 15

More than one-half of all mergers fail or do not live up to financial expectations.

Accepted Answer

It is widely accepted that more than half of all mergers fail to meet their projected financial outcomes.

Question 16

What is the difference between a general partnership and a limited partnership? What would be some reasons for choosing a limited partnership?

Accepted Answer

The answer of What is the difference between a general...

Question 17

A conglomeration occurs when two companies selling different but related products in the same market combine.

Accepted Answer

A conglomeration occurs when two companies that are involved in entirely different businesses combine, not when they sell related products in the same market.

Question 18

Not-for-profit organizations may NOT earn a profit.

Accepted Answer

Not-for-profit organizations can earn a profit, but they must reinvest any profits back into the organization's mission rather than distributing them to owners or shareholders.

Question 19

A small group of businesspeople decide that the best way to do business,while simultaneously protecting their own assets,is to form a corporation.What steps do they need to take in order to successfully establish a corporation?

Accepted Answer

The answer of A small group of businesspeople decide that...

Question 20

Melissa and Claudia are considering becoming business partners and establishing a clothing boutique.They agree that they need to have a partnership agreement before they start the business.What factors should Melissa and Claudia consider when writing their partnership agreement?

Accepted Answer

The answer of Melissa and Claudia are considering becoming business...

Quiz 6: Forms of Business Ownership