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Exam 8: Forms of Business Ownership

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Question 61

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Tara Brtek owns and operates the Singing Pig Food Company. Brtek makes and markets 20 different gourmet mustards, salsas, marinades, and dip mixes using her crooning pig logo. If Brtek decides to incorporate her business to make it easier to find investors, what would be her first step?

A) elect a board of directors
B) sell stock to her customers
C) write the articles of incorporation
D) hold an organizational meeting with shareholders

E) A) and B)
F) A) and C)

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Question 62

Multiple Choice

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What does the fact that a corporation has limited liability mean?

A) Owners' liabilities are limited to the amount invested.
B) It can earn a limited amount.
C) Some of the owners are limited in earnings.
D) The life of the corporation is limited.

E) B) and C)
F) A) and B)

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Question 63

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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.

A corporation can best be described by which of the following statements?

What term is used if a takeover goes against the wishes of the target company's management and board of directors?

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

In a limited partnership, all of the partners have limited liability.

To get personal liability protection doctors, lawyers, accountants, plumbers and electricians usually set themselves up as which of the following?

A person who buys a franchise has the same level of control as an entrepreneur who opens his or her own sole proprietorship.

Oscar Patel and Jon O'Keefe own and operate a janitorial cleaning service. Patel bought a new computer, which he plans for the company to use to track its customers and suppliers, and for making business forecasts. Patel plans on using an installment plan to pay for the computer. O'Keefe was not asked if he thought the company needed a computer and was unhappy when he learned that he and Patel are both liable for the payments for the computer. Patel and O'Keefe have which of the following type of business?

Jayson Tully is contemplating the purchase of a Subway restaurant franchise. Which of the following is an advantage?

What is the first step in incorporating a company?

Which of the following statements best describes cooperatives?

North American Van Lines and Allied Van Lines merged to create the world's largest moving company. Prior to the merger, North American was the leading company in moving high-end merchandise such as computer and hospital equipment, while Allied specialized in households. What type of merger is this?

Who owns a corporation?

In 1984, Suzanne Pogell wanted to learn to sail, but she could find no one to teach her. She finally did convince someone to teach her to sail and, after mastering sailing, she started an all-woman sailing school called "Womanship" as a sole proprietorship. Which of the following represents the meaning of unlimited liability to Suzanne?

Articles of incorporation usually specify the life of a corporation as a certain number of predetermined years.

What is the most common form of business organization?

What is the term for when a public company becomes a private corporation?

Shareholders in a corporation have limited liability.