Exam 8: The Organizational Plan: Teams, Legal Structures, Alliances, and Directors

Match the term with its definition. -The right of stockholders to buy new shares of stock before they are offered to the public

For the best success, strategic alliance partners should structure contracts to ensure growth, including an "easy out" clause if the alliance does not go well.

There are no limits on the owner's personal liability in a sole proprietorship.

Match the term with its definition. -A partner in a limited partnership who is not active in the management of the partnership and has limited personal liability

Match the term with its definition. -The governing body of a corporation, elected by the stockholders

A typical common stockholder of a corporation

Match the term with its definition. -A situation in which a court concludes that incorporation has been used to perpetrate a fraud, skirt a law, or commit some wrongful act, and it removes liability protection from the corporate entity

Partners always share profits and losses equally.

Creating a partnership allows a business to pool the managerial talents and capital of those individuals joining together as partners.

Match the term with its definition. -A form of organization in which owners have limited liability but pay personal income taxes on business profits

Match the term with its definition. -An interconnected system of relationships with other people

Glenda, an employee of a corporation, caused a traffic accident while on company business. Which of the following will pay for the damages?

A partnership reports the income it earns to the Internal Revenue Service, but the partnership itself does not pay any taxes.

What services are board members expected to perform for the corporation?

Match the term with its definition. -A partnership with at least one general partner and one or more limited partners

The compensation paid to board members

Webster is reviewing résumés looking for candidates for leadership positions in his very young company. Webster is putting together his:

The legal document that spells out the partners' rights and duties is called the

After working together for a few months, disputes begin to arise between two of the young company's leaders. Their differences seem to be irreconcilable. The owner's best action is to

The right to buy new shares of stock in proportion to stock already owned is called a