BUS 100 CH. 5-9 EXAM QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026

BUS 100 CH. 5-9 EXAM QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026 sole proprietorship - Answers easiest kind of business, ease of starting and ending it, be your own boss ownership, legacy, retention of company profits, no special taxes Sole Proprietorship disadvantages - Answers unlimited liability (personal losses), limited financial resources, management, time commitment, limited growth and life span general partnership - Answers all owners share in operating business and assuming liability limited partnership - Answers one or more general partners and one or more limited partners Sole Proprietorship Advantages - Answers Easiest to start Least regulated Single owner keeps all the profits Taxed once as personal income general partner - Answers has unlimited liability and active in managing the firm (every partnership must have 1) limited partner - Answers an owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment Master Limited Partnership (MLP) - Answers A partnership that looks much like a corporation (in that it acts like a corporation and is traded on a stock exchange) but is taxed like a partnership and thus avoids the corporate income tax. limited liability partnership - Answers All partners are limited partners and not responsible for the debts and other liabilities of other partners partnership advantages - Answers longer survival, more financial resources, shared management, no special taxes Partnership Disadvantages - Answers difficulty of termination, unlimited liability (liable for other's mistakes), division of profits, disagreements among partners Conventional (C) Corporation - Answers a state-chartered legal entity with authority to act and have liability separate from its owners (stockholders) Advantages of a corporation - Answers limited liability, ability to raise money for investment, size (resources), perpetual life, ease of ownership change, attracting talented employees, separation of ownership from management (can cause money from stockholders without getting involved in management) corporations disatvantage - Answers initial cost, paperwork, double taxation, two tax returns (corporate and individual), size, difficulty of termination, conflict with stockholders and board of directors articles of incorporation - Answers filed in the secretary of state's office: the corporations name, names of people incorporated, purposes, duration, number of shares, voting rights, minimum capital, address of office, name and address of legal service worker and first directors, public information s corporation - Answers A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships: have no more than 100 shareholders, shareholders that are individuals or estates and citizens of the us, have only one class of stock, derive no more than 25% of income from passive resources passive resources - Answers rents, royalties, interest limited liability company - Answers A business organization in which the business (not the owner) is liable for the company's debts, like S corp but without eligibility requirements LLC Advantages - Answers limited liability, choice of taxation; flexible ownership rules, flexible distribution of profits and losses, operating flexibility (arent required to keep minutes, written resolutions, hold annual meetings) LLC Disadvantages - Answers no stock, fewer incentives, self employment taxes, paperwork merger - Answers the result of two firms forming one company acquisition - Answers One company's purchase of the property and obligations of another company. vertical merger - Answers the combination of two or more firms involved in different stages of producing the same good or service horizontal merger - Answers the combination of two or more firms competing in the same market with the same good or services leveraged buy out - Answers an attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing franchise agreement - Answers an arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell a product or service to others in a given territory advantages of franchises - Answers Management and marketing assistance Personal ownership Nationally recognized name Financial advice and assistance Lower failure rate Disadvantages of Franchising - Answers Large start-up costs Shared profit Management regulation Coattail effects (the actions of other franchises have an impact on your future growth and profitability) Restrictions on selling Fraudulent franchisors how is franchising successful - Answers convenience and predictable level of service and quality cooperative - Answers owned and controlled by the people who use it who pool their resources for mutual gain partnership - Answers termination of a partnership is difficult without a ____ agreement bylaws - Answers A set of governing rules adopted by a corporation or other association. conglomerate merger - Answers the joining of firms in completely unrelated industries leveraged buyout - Answers an attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing coattail effect - Answers when a fellow franchisee does something that has an impact on growth and profitability canada - Answers which country does us use most for franchising? reasons for entrepreneurship risk - Answers opportunity, profit, independence, challenge entrepreneurial attributes - Answers self-directed, self-nurturing, action-oriented, highly energetic, tolerant of uncertainty entrepreneurial team - Answers a group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product Inteapreneur - Answers creative people who work ad entrepreneurs within corporations micropreneurs - Answers entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle working at home challenges - Answers -getting new customers -managing time -keeping work and family tasks separate -abiding by city ordinances -managing risk enterprise zones - Answers Specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support incubators - Answers centers that offer new businesses low-cost offices with basic business services self employment assistance program - Answers allows participants to collect self-employment payments instead of regular unemployment checks small business - Answers an independent business with fewer than 500 employees, not dominant in field of operation small - Answers of all nonfarm businesses in the us, 99% are considered ___ by SBA standards causes of small business failure - Answers • Plunging in without first testing the waters on a small scale. • Underpricing or overpricing goods or services. • Underestimating how much time it will take to build a market. • Starting with too little capital. • Starting with too much capital and being careless in its use. • Going into business with little or no experience and without first learning something about the industry or market. • Borrowing money without planning just how and when to pay it back. • Attempting to do too much business with too little capital.