Unit 5: Business and Labor Review

Match the following key terms to their definitions.

• an amount owed

• Sole Proprietorship

• A business owned by one person

• business organization

• authorization to start a business

• liability

• Any financial extras beyond paycheck

• fringe benefits

• the ownership structure of a company

• business license

Which of the following is a potential disadvantage for this sole proprietor?

• If he does not sell enough meals to make a profit, stockholders might withdraw their investment.

• If he decides to retire, he will have to find someone else to take over as the owner before he can quit the business.

• If a customer accuses him of a serving spoiled food and sues him, he is solely responsible for any debts or damages that are incurred.

• If he wants to buy a second food truck, he will have to find a partner to operate that truck.

Which of the following statements is accurate, based on this graph?

• Nearly 90 percent of sole proprietorships earned less than $100,000 per year

• Nearly 90 percent of sole proprietorships earned less than $50,000 per year.

• Nearly 70 percent of sole proprietorships earned from $10,000 to $25,000 per year

• Nearly 30 percent of sole proprietorships earned from $50,000 to $500,000 per year.

The key characteristic of a sole proprietorship represented in this photo is

• the right of the business owner to sell products anywhere.

• the right of the business owner to operate without a business license

• the right of the business owner to set prices on the products

• the right of the business owner to hire workers.

A sole proprietor would be at a loss if her expenses exceeded her income.

• True

• False

Match the following

• partnership in which all partners are equally responsible for management and debts

• articles of partnership

• partnership with at least one general partner and one limited partner

• General Partnership

• a partnership agreement

• limited partnership

• business owned and operated by two or more individuals

• limited liability partnership

• partnership where partners have limited liability

• partnership

Why might a medical profession structure their business as a limited liability partnership rather than a general or limited partnership?

• in order to focus on providing primary care to lower-income patients

• in order to limit personal responsibility if one of them is sued

• in order to allow them to hire a manager to run the business

• in order to encourage investors to buy stock in the business

A semi-independent business that pays fees (known as ​ (a)   ) to a parent company in return for the exclusive right to sell a certain product or service in a given area is known as a business ​ (b)   .

• franchise
• royalties
• dividends
• corporation

Match the following terms to their definitions

• A corporation owned by a small group of individuals

• closely held corporation

• A business owned by stockholders

• corporation

• A corporation whose stock is traded on a stock exchange

• dividend

• The portion of corporate profits paid out to stockholders

• stock

• A certificate of corporation ownership

• publicly held corporation

Match the following terms to their definitions

• company that operates in multiple countries

• Limited Liability Company (LLC)

• a form of business ownership that offers both limited liability to its owners and flexible tax treatment

• multinational corporation (MNC)

• merger of companies at different stages of production or distribution

• horizontal merger

• merger of companies that operate in the same industry

• vertical merger

• corporation that owns other companies in different industries

• conglomerate