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Ch. 8 Business Exam
Types of Businesses
| Question | Answer |
|---|---|
| This is a one person business | sole proprietorship |
| Two or more persons own and run this type of business | partnership |
| Many owners or shareholders own this type of business | corporation |
| A business investment that involves renting or leasing another successful business model | franchise |
| The simplest and easiest type of business to organize and setup | sole proprietorship |
| This type of business is somewhat simple to organize (but not the easiest and not the most difficult to do so) | partnership |
| Very complex and more difficult to organize and setup | corporation |
| This (these) type(s) of business require(s) relatively small amount of capital needed; often supplied by owner(s) | sole proprietorship; partnership |
| This type of business requires large amount of capital; supplied by stockholders | corporation |
| Owner runs this type of business by himself/herself | sole proprietorship |
| Owner(s) share(s) responsibilities and decision-making in this type of business | partnership |
| This type of business is managed by a board of directors and salaried professional managers | corporation |
| This type (s) of business has to deal with double taxation. | corporation |
| This type (s) of business is (are) taxed as an individual only once | sole proprietorship; partnership |
| This type (s) of business face unlimited liability. | sole proprietorship; partnership |
| This type (s) of business face limited liability. | corporation |
| The method of ownership transfer or how the business can be terminated is by owner's decision or death. | sole proprietorship |
| The method of ownership transfer or how the business can be terminated is by the sale of shares so ownership is easily transferred. | corporation |
| The method of ownership transfer or how the business can be terminated is by having partners agree on ownership changes or termination of business | partnership |
| A business owner's liability is restricted to amount invested in the business-investors' and owners' private assets are not at risk if the company fails. | limited liability |
| The business owner’s personal assets may be used to pay off the debts of the firm. | unlimited liability |
| The most common form of business is ___________________. | sole proprietorship |
| The making of a direct funding appeal to a “crowd” of possibly interested investors on a social networking platform | crowdfunding |
| provider of investment funds to a start-up business in exchange for partial ownership of the business | venture capitalist |
| investors who provide funds to less-promising start-ups and more interested in survival of business rather than return on investment | angel investor |
| places where entrepreneurs can receive the training and other assistance to build a successful start-up business | incubator |
| Another name for crowdfunding is ___________. | crowdsourcing |
| Which business form(s) does not face limited life? | corporation |
| Identify the advantages of a sole proprietorship. | 1, Easy to start up 2. Ease of management 3. No sharing of profits 4, Profit of firm is taxed only once 5, Psychological satisfaction of being your own boss 6. Easy to dissolve business (just pay outstanding bills and close shop) |
| Identify the disadvantages of a sole proprietorship. | 1. Unlimited liability 2. Limited ability to raise funds for business 3. Small size leads to inefficiencies 4. Limited managerial experience of owner 5. Difficulty in attracting qualified employees 6. Limited life |
| Identify the advantages of a partnership. | 1. Ease of start-up 2. Ease of management 3. Profit of firm is taxed only once 4. Can raise financial capital (money) easier than sole proprietorships 5. More efficient (than sole proprietorship) |
| Identify the disadvantages of a partnership. | 1. Unlimited liability in a general partnership 2. Limited life 3. Decision may become complicated |
| Identify the advantages of a corporation. | 1. Ease of raising financial capital 2. Limited liability 3. Professional management of firm 4. Unlimited life 5. Ease of transfer of ownership |
| Identify the disadvantages of a corporation. | 1. Double taxation 2. Difficulty in getting a charter 3. Owners have little power or say how the corporation is run 4. Subject to more government regulations than other business forms |
| Examples of this type of business include Microsoft, Apple, Nike, Amazon | corporation |
| Examples of this type of business include medical offices, law offices, advertising agencies, accounting forms, invest firms | partnership |
| Examples of this type of business include the local barbershop, many restaurants, family farm, carpet-cleaning service, lemonade stand, and landscaping businesses | sole proprietorship |
| Identify the advantages of a franchise. | 1. National advertising 2. Proven successful company-less chance of failure 3. Often, the chain will have a training program and professional advice 4. Excellent quality standards 5. Liability of misconduct of employees shared with franchisor |
| Identify the disadvantages of a franchise. | 1. High start-up costs 2. Substantial termination costs- 3. Often have less control over business operations |
| Identify the things that must be in a business plan. | (1) Broad overview of company; (2) management team; (3) How does it work? ; (4)Explaining the marketplace where it belongs; (5) Competition; (6) Market strategy/roadmap; (7) Costs and revenues (8) How much are you asking investors for |
Created by:
teacherdavidfrost
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