Questions and Answers
What describes the process of how a business incorporates?
The business must take a shareholder vote and gain government permission, followed by a stock sale.
Which are examples of sole proprietorships? (Select all that apply)
What do entrepreneurs who want to open a franchise do?
Buy the rights from the parent company and invest in a location approved by the parent company.
What are some disadvantages of sole proprietorships and partnerships?
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A disadvantage of corporations is that shareholders have to pay ______ on profits.
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How do corporations raise money and resources to expand?
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Which document determines the number of shares a company can sell?
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What happens to earnings in a cooperative?
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What are the most common business organizations in the United States?
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Franchising is typically done by whom?
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Study Notes
Business Incorporation
- The process of incorporating a business involves a shareholder vote, obtaining government approval, and conducting a stock sale.
Examples of Sole Proprietorships
- Independent workers, tax preparers, and freelance writers exemplify sole proprietorships.
Franchising Process
- Entrepreneurs aiming to establish a franchise must buy rights from the parent company and invest in an approved location.
Disadvantages of Business Structures
- Sole proprietorships place the burden of many tasks on one individual, while partnerships require consensus among multiple people for decision-making.
Corporate Taxation
- Shareholders in corporations are required to pay taxes on profits.
Fundraising through Corporations
- Corporations raise money and resources for expansion by agreeing to sell stocks.
Corporate Charter
- A corporate charter specifies the maximum number of shares a company may sell.
Earnings in Cooperatives
- In a cooperative business, earnings are distributed among member-owners.
Common Business Organizations
- The most prevalent form of business organization in the United States is sole proprietorships.
Franchising Entities
- Franchising activities are typically conducted by corporations.
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Description
Test your knowledge on various business structures with these flashcards. Learn about the incorporation process, sole proprietorship examples, and franchise ownership. Perfect for students and entrepreneurs alike!
