CBAD 344 Final Exam Review – Questions & Appropriate
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Terms in this set (93)
One who initiates and assumes the financial risk of a new
Entrepreneur business enterprise and undertakes to provide or control its
management.
Most important: which form of business is most appropriate for
Factors considered in creation
endeavor. other factors: 1. ease of creation 2. liability of owners 3.
by entreprenuer
tax considerations 4. the ability to raise capital
Simplest form of Business, the owner is the business, the owner
reports the business income as personal income and is legally
Sole Proprietorship
responsible for all debts and obligations incurred by the
business. 2/3 of U.S. business's are sole proprietorships.
MAJOR: proprietor owns the entire business and has the right to
receive all of it's profits.
Advantages of Sole
- easier and less costly
Proprietorship
- only a few legal formalities involved
- generally no documents need to be filed with the government
MAJOR: pays only personal income taxes (includes social
security and medicare) on the business's profits.
- the business itself does not need to file an income tax return
Tax Advantages to a SP - allowed to establish retirement accounts that are tax-exempt
until withdrawn.
- can be liable for other taxes that are collected an applied, ex:
disbursement of unemployment compensation.
MAJOR: offers more flexibility than a partnership or corp. Free to
make any decisions regarding the business
- decides who to hire, when to go on vacation, what kind of
Flexibility Advantage to a SP
business to pursue
- can transfer all or part of business to another proprietor and
does not need input/ "okay" from anyone else.
Disadvantages of a Sole MAJOR: proprietor alone bears any losses or liabilities
Proprietorship associated with the business, they have unlimited liability.
Personal Asset Risk creditors to the business can go after personal assets of the
Disadvantage of a Sole owner to satisfy any business debts the owner may have to them.
Proprietorship
, -After the sole proprietor dies, so does the business, it is
automatically dissolved.
Lack of Continuity and Limited
- Proprietor is limited to personal funds and loans that can be
Ability to Raise Capital
obtained for the business. Lenders are often unwilling to make
Disadvantage of a Sole
loans to a sole proprietor, esp. startups because there are
Proprietorship
unlimited risks and liabilities and SP may not be able to pay back
debts.
Any arrangement in which the owner of a trademark, trade name,
Franchise or copyright licenses another to use that trademark, trade name,
or copyright in the selling of goods or services.
One receiving a license to use another's (the franchisor),
Franchisee trademark, trade name, or copyright in the sale of goods or
services.
One licensing another (the franchisee) to use the owner's
Franchisor trademark, trade name, or copyright in the selling of goods or
services.
a manufacturer (the franchisor) licenses a dealer (the franchisee)
Types of Franchises:
to sell its product. Oftentimes covering an exclusive territory. -ex:
Distributorship
ford or chevy (dealership)
Franchise operates under a franchisor's trade name and is
identified as a member of a select group of dealers that engage
in the franchisor's business. Franchisee is normally subject to
Types of Franchises: Chain-Style follow standardized or prescribed methods of operation. May be
Business Operations required to obtain supplies from franchisor. Commonly used in
service-related business's
-ex: McDonalds, fast food chains, real-estate, century 21, tax
preparing, H & R Block
The franchisor transmits the franchisee the essential ingredients
Types of Franchises: or formula to make a particular product. The franchisee then
Manufacturing or Process-Plant markets the product either at wholesale or in retail in accordance
Arrangements with the franchisor' standards. Ex: pepsi cola, soft drink bottling
companies
Federal gov regulates franchising through the laws that apply to
Laws Governing Franchising:
specific industries and through the Franchise Rule, created by
Federal Regulation
the Federal Trade Commission (FTC).
Primary a contractual relationship, governed by contract law, if is
Laws Governing Franchising primarily selling of products manufactured by the franchisor,
article 2 of commercial code governs it.
Congress has enacted laws that protect franchisees in certain
industries. Protect the franchisee from unreasonable demands
Industry-Specific standards for and bad faith terminations of the franchise by the franchisor.
Franchising ex: Automobile dealerships, service stations. Automobile
manufacturer-franchisor cannot set unrealistically high sales
quota.
FTC's rule that requires franchisors to disclose certain material
facts that a prospective franchisee needs in order to make an
The Franchise Rule informed decision concerning the purchase of a franchise.
- those who violate this are subject to civil penalties, and FTC can
sue on behalf on injured parties to recover damages
Written (or electronic disclosures), reasonable basis for any
FTC's Franchise Rule
representation, projected earnings figures, actual data,
Requirments
explanation of terms
Franchise relationship is defined by the contract between the
franchisor and the franchisee. It specifies terms and conditions of
The Franchise Contract the franchise and explains rights and duties of each party. If
either party fails to meet these requirements they are subject to a
lawsuit or breach of contract.
Solutions
Save
Students also studied
Perio Study DENT 475 - Implant components NBDE II Review - Pro
Teacher 78 terms 42 terms 69 terms
Hunter_Charters Preview gillphil Preview melissa_jarvis7
Terms in this set (93)
One who initiates and assumes the financial risk of a new
Entrepreneur business enterprise and undertakes to provide or control its
management.
Most important: which form of business is most appropriate for
Factors considered in creation
endeavor. other factors: 1. ease of creation 2. liability of owners 3.
by entreprenuer
tax considerations 4. the ability to raise capital
Simplest form of Business, the owner is the business, the owner
reports the business income as personal income and is legally
Sole Proprietorship
responsible for all debts and obligations incurred by the
business. 2/3 of U.S. business's are sole proprietorships.
MAJOR: proprietor owns the entire business and has the right to
receive all of it's profits.
Advantages of Sole
- easier and less costly
Proprietorship
- only a few legal formalities involved
- generally no documents need to be filed with the government
MAJOR: pays only personal income taxes (includes social
security and medicare) on the business's profits.
- the business itself does not need to file an income tax return
Tax Advantages to a SP - allowed to establish retirement accounts that are tax-exempt
until withdrawn.
- can be liable for other taxes that are collected an applied, ex:
disbursement of unemployment compensation.
MAJOR: offers more flexibility than a partnership or corp. Free to
make any decisions regarding the business
- decides who to hire, when to go on vacation, what kind of
Flexibility Advantage to a SP
business to pursue
- can transfer all or part of business to another proprietor and
does not need input/ "okay" from anyone else.
Disadvantages of a Sole MAJOR: proprietor alone bears any losses or liabilities
Proprietorship associated with the business, they have unlimited liability.
Personal Asset Risk creditors to the business can go after personal assets of the
Disadvantage of a Sole owner to satisfy any business debts the owner may have to them.
Proprietorship
, -After the sole proprietor dies, so does the business, it is
automatically dissolved.
Lack of Continuity and Limited
- Proprietor is limited to personal funds and loans that can be
Ability to Raise Capital
obtained for the business. Lenders are often unwilling to make
Disadvantage of a Sole
loans to a sole proprietor, esp. startups because there are
Proprietorship
unlimited risks and liabilities and SP may not be able to pay back
debts.
Any arrangement in which the owner of a trademark, trade name,
Franchise or copyright licenses another to use that trademark, trade name,
or copyright in the selling of goods or services.
One receiving a license to use another's (the franchisor),
Franchisee trademark, trade name, or copyright in the sale of goods or
services.
One licensing another (the franchisee) to use the owner's
Franchisor trademark, trade name, or copyright in the selling of goods or
services.
a manufacturer (the franchisor) licenses a dealer (the franchisee)
Types of Franchises:
to sell its product. Oftentimes covering an exclusive territory. -ex:
Distributorship
ford or chevy (dealership)
Franchise operates under a franchisor's trade name and is
identified as a member of a select group of dealers that engage
in the franchisor's business. Franchisee is normally subject to
Types of Franchises: Chain-Style follow standardized or prescribed methods of operation. May be
Business Operations required to obtain supplies from franchisor. Commonly used in
service-related business's
-ex: McDonalds, fast food chains, real-estate, century 21, tax
preparing, H & R Block
The franchisor transmits the franchisee the essential ingredients
Types of Franchises: or formula to make a particular product. The franchisee then
Manufacturing or Process-Plant markets the product either at wholesale or in retail in accordance
Arrangements with the franchisor' standards. Ex: pepsi cola, soft drink bottling
companies
Federal gov regulates franchising through the laws that apply to
Laws Governing Franchising:
specific industries and through the Franchise Rule, created by
Federal Regulation
the Federal Trade Commission (FTC).
Primary a contractual relationship, governed by contract law, if is
Laws Governing Franchising primarily selling of products manufactured by the franchisor,
article 2 of commercial code governs it.
Congress has enacted laws that protect franchisees in certain
industries. Protect the franchisee from unreasonable demands
Industry-Specific standards for and bad faith terminations of the franchise by the franchisor.
Franchising ex: Automobile dealerships, service stations. Automobile
manufacturer-franchisor cannot set unrealistically high sales
quota.
FTC's rule that requires franchisors to disclose certain material
facts that a prospective franchisee needs in order to make an
The Franchise Rule informed decision concerning the purchase of a franchise.
- those who violate this are subject to civil penalties, and FTC can
sue on behalf on injured parties to recover damages
Written (or electronic disclosures), reasonable basis for any
FTC's Franchise Rule
representation, projected earnings figures, actual data,
Requirments
explanation of terms
Franchise relationship is defined by the contract between the
franchisor and the franchisee. It specifies terms and conditions of
The Franchise Contract the franchise and explains rights and duties of each party. If
either party fails to meet these requirements they are subject to a
lawsuit or breach of contract.
