Chapter 4 Flashcard

Front

A sole proprietorship requires minimal paperwork and has low startup costs.

Back

True

Front

Limited partners in a partnership have equal responsibility for managing the business.

Back

False

Front

Do corporations offer limited liability protection to their stockholders?

Back

True

Front

Do franchisors have full control over the day-to-day operations of franchisee businesses?

Back

False

Front

Horizontal mergers occur between companies in the same industry to reduce costs.

Back

True

Front

What is a key characteristic of a sole proprietorship?

Back

A business established, owned, and operated by one person.

Front

Which of the following is an advantage of a sole proprietorship? A. Easy access to funding, B. Limited liability, C. Full control over business decisions, D. Shared responsibilities

Back

Full control over business decisions

Front

What is a major disadvantage of a sole proprietorship?

Back

Unlimited liability

Front

Which of the following is an advantage of a partnership? A. Double taxation, B. Access to diverse skills and expertise, C. Individual liability protection, D. Easy dissolution

Back

Access to diverse skills and expertise

Front

Which of the following is a disadvantage of a partnership? A. Limited liability for all partners, B. Simplified profit-sharing agreements, C. Easy exit for all partners, D. Risk of conflicts over business decisions

Back

Risk of conflicts over business decisions