Unit 2

Question 1

sole proprietorship

Answer 1

A business directly owned by one person who receives all profits and is responsible for all responsibilities for liabilities.

Question 2

unlimited liability

Answer 2

Responsibility for claims against the business that goes beyond the amount invested in the business and extends to one’s personal assets.

Question 3

partnership

Answer 3

A business structure where two or more individuals share ownership, responsibilities, and profits.

Question 4

partnership agreement

Answer 4

The legal document that establishes a partnership and each partner’s responsibility.

Question 5

general partnership

Answer 5

The most common form of partnership, in which the partners share in responsibility, decision making, and profits. However, the partners have unlimited liability for the debts of the business.

Question 6

limited partnership

Answer 6

A partnership in which the liability of each partner is limited to the amount of his or her investment.

Question 7

limited liability

Answer 7

A restriction on the extent to which the shareholders (owners) of a corporation are personally responsible for its debts, limiting their liability to the amount they originally invested.

Question 8

corporation

Answer 8

A business owned by, but existing separately from, its shareholders.

Question 9

shares

Answer 9

A unit of ownership in a corporation.

Question 10

shareholders

Answer 10

A person who owns shares in a corporation; also called a stockholder.

Question 11

board of directors

Answer 11

A group of individuals who run a corporation or co-operative and make decisions on behalf of the shareholders.

Question 12

dividend

Answer 12

The part of a corporation’s profit after taxes that each shareholder receives.

Question 13

private corporation

Answer 13

A corporation owned by a small number of shareholders.

Question 14

public corporation

Answer 14

A corporation with many shareholders, whose shares can be bought and sold on a stock exchange.

Question 15

Crown corporation

Answer 15

A business owned and operated by the provincial and federal government.

Question 16

municipal corporation

Answer 16

A formal name for a city or town.

Question 17

co-operative

Answer 17

A business owned by members who make use of the goods and services offered.

Question 18

franchiser

Answer 18

The parent company who grants the franchise and provides goods and/or services to the franchisee.

Question 19

franchisee

Answer 19

A person who runs a franchisee operation and is under contract; or licensing agreement, with the franchisor.

Question 20

SOHO (small office, home office)

Answer 20

Short for “small office, home office” SOHO are home-based businesses.

Question 21

e-commerce

Answer 21

A method of direct distribution that uses the Internet to sell products directly to consumers.

Question 22

website

Answer 22

A place or site on the Internet where a business can be established and accessed by consumers. A website consists of one or more web pages designed to provide information about the business and display goods and services offered for sale.

Question 23

domain name

Answer 23

The name given to a website; a web address:

Question 24

gross domestic product (GDP)

Answer 24

The total value of all goods and services produced in a country during a specific period of time (including intel produced by foreign-owned companies)

Question 25

debt financing

Answer 25

Borrowing money to fund a business, which must be paid back with interest.

Question 26

equity financing

Answer 26

Raising money using the owner's resources or money from investors. Often by selling part of the ownership (shares) of the business.

Question 27

forecasting

Answer 27

Predicting future business trends, like sales or expenses, based on current data.

Question 28

revenue

Answer 28

The money a business receives for the product and/or services it sells or from its investments.

Question 29

joint ventures

Answer 29

A business project that matches the skills of two individuals or businesses for mutual benefits.

Question 30

strategic alliances

Answer 30

A partnership or agreement between companies where they work together to achieve a common goal without merging into one business.

Question 31

merger

Answer 31

A process whereby one company combines with or takes over the ownership of one or more companies.

Question 32

offshoring

Answer 32

The relocation of some of a company’s operations to another company - usually to reduce costs.

Question 33

multinational corporation

Answer 33

A business operating in or involving several nations. Also known as transnational.

Question 34

Finding Financing?

Answer 34

Loans, savings, investors, grants.

Question 35

Sole Proprietorship Advantages:

Answer 35

Full Control: Simple to Establish:

Question 36

Sole Proprietorship Disadvantages:

Answer 36

Unlimited Liability, Could be challenging to raise funds, lack of assistance.

Question 37

Partnership Advantages

Answer 37

allowing shared responsibility and resources.

Question 38

Partnership

Answer 38

Owned by two or more individuals

Question 39

Corporation

Answer 39

A separate legal entity owned by shareholders

Question 40

Partnership Disadvantages

Answer 40

joint liability and potential conflicts among partners.

Question 41

Corp adv

Answer 41

perpetual existence and reduced personal risk.

Question 42

Corp DIsadv

Answer 42

double taxation and more regulatory requirements.

Question 43

Cooperative

Answer 43

Owned by members who share in profits and decision-making.

Question 44

Cooperative adv

Answer 44

Advantages include member control and community focus.

Question 45

Coop disadv

Answer 45

slower decision-making and limited funding options.

Question 46

Why Start Your Own Business?

Answer 46

independence, the opportunity to pursue your passion, potential for financial rewards, and flexibility in your work schedule

Question 47

When to Choose a Home-Based or Web-Based Business

Answer 47

Choose a home-based or web-based business if you want low overhead costs, flexibility, and the ability to reach a broader audience.

Question 48

Where to Find Information About a Business

Answer 48

Online resources, SBA, industry associations.

Question 49

Start-Up Costs to Start a Business

Answer 49

Business registration fees Licenses and permits Equipment and supplies Marketing and advertising

Question 50

Steps Involved in Running a Business

Answer 50

Business planning, Registration, Financing, Operations.

Question 51

Risks Associated with Running a Business

Answer 51

Financial risk, Legal risk:

Question 52

International Business Structures

Answer 52

Subsidiaries: Separate legal entities owned by a parent company. Branches: Extensions of a parent company operating in another country. Joint ventures: Partnerships with local firms to share resources and risks. Franchises: Allowing foreign entities to use a brand’s business model and trademarks.

Question 53

Benefits

Answer 53

Each business structure has unique benefits, such as liability protection, ease of management, and tax advantages, allowing entrepreneurs to choose the best fit for their goals and circumstances.