Ch. 6 Forms of Business Ownership Flashcards

1
Q

describe sole proprietorship

A

one person owning and operating a business, without forming a corporation

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2
Q

in a sole proprietorship the … and the .. are …

A

the business and the owner are a single entity

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3
Q

how many businesses in Canada fall under sole proprietorship ownership

A

almost 1/4 of all registered businesses

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4
Q

Stock: describe a private corporation

A

not traded on any stock exchange and limited to 50 or fewer stockholders

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5
Q

Stock: describe public corporations

A

shares are traded on one or more stock exchanges

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6
Q

Stock: describe non-profit

A

preforms public service, has special tax considerations to encourage formation

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7
Q

describe professional corporations

A

owners provide professional services

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8
Q

describe a crown corporation

A

one that can only be registered by the provincial or federal government

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9
Q

describe how owners affect management

A

owners select the board of directors, the board of directors hire officers, and the officers select managers

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10
Q

name Canada’s top five largest corporations (most to least)

A

Wal-mart Canada, Costco Wholesale Canada, Desjardins Group, McKesson Canada and Honda Canada

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11
Q

corporate governance refers to …

A

the process and policies that determine how an organization interacts with its stakeholders, both internal and external

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12
Q

corporate governance is necessary because of …

A

the evolution of public ownership

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13
Q

what are “articles of incorporation”

A

a legal authorization from the federal or provincial/territorial government for a company to use the corporate format

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14
Q

a merger is …

A

the result of two firms forming one company

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15
Q

an acquisition is …

A

one company’s purchase of the property an obligations of another company

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16
Q

a vertical merger is …

A

the joining of two firms involved in different stages of related businesses

17
Q

a horizontal merger joins …

A

two firms in the same industry and allows them to diversify or expand their products

18
Q

a conglomerate merger …

A

units firms in completely unrelated industries

19
Q

list the first two reasons why mergers do not work

A

companies overpay to acquire another firm and acquiring company overestimates cost savings and synergies

20
Q

list the last two reasons why mergers do not work

A

after merger, managers disagree about integrating operations and after merger, cost cutting hurts business, costing top employees and customers

21
Q

a leveraged buyout (LBO) is an attempt …

A

by employees, management, or a group of investors to purchase an organization primarily through borrowing. the funds borrowed are used yo buy out the stockholders in the company

22
Q

a franchise agreement is an arrangement whereby …

A

someone with a good idea for a business sells (franchisor) sells the rights to use the business name and to sell a good or service (the franchise) to others (the franchisee) in a given territory

23
Q

list four things associated with franchisors

A

assigns territory, may provide financial aid/advice, offers merchandise/supplies at competitive prices and provides training/support

24
Q

list four things associated with a franchisee

A

pays upfront costs, makes monthly payment to franchisor, runs business by franchisor’s rules/procedures and buys materials from franchisor/approved supplier

25
Q

list four ways to avoid a franchise disaster

A

1) research officers and their business experience 2)get summary of any bankruptcy and litigation 3)estimate all costs to set up franchise 4) review franchise contract and three most recent financial statements

26
Q

list four things associated with Co-Operatives

A

owned by the members, pay no income taxes, profits are shared amongst the members, co-workers, farmers, fishermen, consumers etc. band together to form “co-ops”

27
Q

consumer co-operative provide …

A

their members with goods and services for their personal use

28
Q

producer co-operatives process …

A

and market their members’ goods and services directly, while others may also sell the products necessary to their members’ economic activities

29
Q

multistakeholder (or solidarity) co-operative membership is …

A

made of different categories of members who share a common interest in the organization

30
Q

worker co-operative. their purpose is …

A

to provide employment for their members through operating an enterprise

31
Q

worker-shareholder co-operative holds …

A

partial ownership of the business in which it’s members are employed

32
Q

a federation is a …

A

co-operative of co-operatives in which the members are co-operatives themselves

33
Q

a mutual is an organization …

A

created by and for its members to offer mutual aid or mutual protection