Forms Of Business Ownership

Question 1

What explain soleproprietorship?

Answer 1

Has one owner and liabilities are unlimited with the individuals income taxed due to single ownership usually easy to conduct business with typically fewer than 50 people

Question 2

Give 4 advantages of sole proprietorship

Answer 2

Formation is easy and cost-effective
Secrecy is possible minimising competitors gaining traits secrets
All profit belong to the owner
It can be dissolved easily
Flexibility and control of the business

Question 3

Give four disadvantages of sole proprietorship

Answer 3

The owner has unlimited liabilities
External funds are difficult to find
Owner must have divers skills from management finance and marketing
Survival is tied to the owners life and ability to work
Qualified employees are hard to get a larger companies for better packages

Question 4

What is a partnership?

Answer 4

Has two or more owners and the liabilities are somewhat limited. It is easy for two individuals to conduct business. The individuals income is taxed and profits are shared between partners. 

Question 5

What are the two types of partnership?

Answer 5

General partnership
Limited partnership

Question 6

What is a general partnership?

Answer 6

Involves a complete sharing in management of the business each having unlimited liabilities for debts of the business usually made between lawyers accountants and architects

Question 7

What is the limited partnership?

Answer 7

Has at least one general partner who assumes unlimited liability and at least one partner whose liabilities is limited to their investment. Exist for risky investment project where great loss can be experienced

Question 8

Give 4 advantages of a partnership

Answer 8

Partnership are easy to organise
Partnership have high credit rating due to combined wealth
Combined knowledge and skills from partners
Small partnership can react quickly to changes and decision-making

Question 9

Give 4 disadvantages of partnerships

Answer 9

Have unlimited liability
Partnership is terminated if a partner dies or withdrawals
Difficult to sell a partnerships interest at a fair price
Distribution of profits do not correctly reflect amount of work done
Partners are responsible for each other decisions and bad decisions by one partner maybe risky leading to dispute

Question 10

What is a corporation?

Answer 10

is a legal entity that is separate from its owners (shareholders) One of the key features of a corporation is limited liability, which means that the shareholders’ personal assets are generally protected from the company’s debts and liabilities.

Question 11

What are stocks

Answer 11

Stocks, also known as shares or equities, represent ownership in a corporation. When you buy stocks of a company, you essentially own a portion of that company.

Question 12

What are dividends?

Answer 12

Dividends are payments made by a corporation to its shareholders, usually as a distribution of profits. They can be paid in cash or additional shares of stock.

Question 13

What are the 4 types of corporation?

Answer 13

Domestic corporation
Foreign corporation
Private corporation
Public corporation

Question 14

What is a domestic corporation?

Answer 14

A corporation that conducts business in the state in which it is chartered

Question 15

What is a foreign corporation?

Answer 15

A corporation that contact conduct business outside the state in which it is charted

Question 16

What is the private corporation?

Answer 16

owned by a relatively small number of shareholders and does not offer its shares to the general public through public stock exchanges. Ownership is often closely held by founders, family members, or a small group of investors.

Question 17

What is a public corporation?

Answer 17

is a company whose ownership is dispersed among the general public in the form of publicly traded shares of stock. These shares are bought and sold on stock exchanges, Public corporations are subject to extensive regulatory requirements and are required to disclose financial information and other relevant data to the public on a regular basis.

Question 18

What are the 2 types of public corporations?

Answer 18

Quasi public corporation
Nonprofit corporation

Question 19

What is a quasi corporation

Answer 19

is an organization that is created by the government but operates independently and is not directly under government control. These corporations often provide essential services that are considered to be in the public interest, such as transportation,

Question 20

What is a nonprofit corporation?

Answer 20

These organisations focus on providing a service rather than earning a profit but they are not owned by the government

Question 21

List 4 advantages of a corporation

Answer 21

Limited liabilities providing protection to shareholders
Shareholders can sell or trades dogs to other people without causing termination
Last longer exceeding beyond the lifespan of the owner
Raising money is easier
Business expansion is easier

Question 22

List 4 disadvantages of a corporation

Answer 22

The company is taxed separately and owners a texed for their dividends as well
Forming a corporation can be expensive
Information must be available to Onur through reports
Competitors can access financial reports
Complying with security law takes time
Employment owner, separation

Question 23

What is initial public offering IPO?

Answer 23

It refers to the process by which a private company offers shares of its stock to the public for the first time, thus transitioning from being privately held to being publicly traded.

Question 24

What is the limited liability company LLC?

Answer 24

is a business structure that combines the features of a corporation and a partnership (or sole proprietorship, Like a corporation, an LLC provides limited liability protection to its owners,

Question 25

What is a joint venture?

Answer 25

Is a business arrangement in which two or more parties agree to collaborate and combine their resources, expertise, and capital to undertake a specific project or pursue a specific goal.

Question 26

What is the cooperative co-op?

Answer 26

Is a type of business organization owned and operated by small businesses or individuals for their mutual benefit. In a cooperative, individuals or businesses come together to pool their resources, such as capital, labor, or expertise, to achieve common goals.

Question 27

What is a merger

Answer 27

A merger is a corporate strategy in which two or more companies combine to form a new entity. This can occur through various means, such as a purchase of assets, a stock swap, or a combination of both.

Question 28

Name the three types of mergers

Answer 28

Horizontal merger
Vertical merger
Conglomerate merger

Question 29

What is a vertical merger

Answer 29

two companies that operate at different stages of the production or distribution process within the same industry combine their operations.

Question 30

What is the horizontal merger

Answer 30

when two companies that operate in the same industry and produce similar goods or services combine their operations.

Question 31

What is conglomerate merger

Answer 31

merger involves companies that operate in unrelated industries or sectors coming together. The goal is often to diversify the business and capitalize on new opportunities.

Question 32

What is an acquisition?

Answer 32

The pictures of one company by another company usually buying its stocks