Exam 4: Entrepreneurship, Small Business, and New Venture Creation

In the Business Register, a goods-producing business is considered small if it has fewer than ________ employees, and a service-producing business is considered small if it has fewer than ________ employees.

Short and Shearer are two friends who want to begin an entrepreneurship as business partners. They need to decide whether to start up a new business or to buy an existing business. To do this, Short and Shearer need to weigh the pros and cons of each in order to see what the best strategy for them would be. Which of the following, if true, would strengthen the case for Short and Shearer's starting a new business of their own?

Three friends in the United States want to start a warehousing and distribution business. They each want to be co-owners of the new business with a stake in its profits. The new business will therefore be a corporation, but they need to determine which kind of corporation it should be so that it will best fit their interests in the business. Which of the following, if true about the owners' plan for the new business, would strengthen the case that it should be registered as an S corporation? (Note: An S corporation in the United States is a hybrid of a private corporation and a partnership. It is organized and operates like a corporation, but it is treated like a partnership for tax purposes. To qualify, firms must meet stringent legal conditions.)

Many professional organizations, such as law firms and accounting firms, are formed as

The risks of buying an existing firm are greater than the risks of starting a business from scratch because the existing firm may have a bad reputation among consumers.

Which of the following is not one of the disadvantages of owning a franchise?

Equity refers to the money, or capital, invested in the enterprise by individuals in return for an ownership interest.

What are the two key activities that entrepreneurs must complete when starting a new business? Explain what is involved in each of these activities.

What is a corporation?

Shirley is opening a flower shop and has decided to operate as a sole proprietorship. Which of the following is not an advantage Shirley will have in operating her business?

Tax laws permit ________ to treat the sales revenues and operating expenses of the business as part of their personal finances.

The Miller brothers (Jack, Bill, and Evan) are about to fulfill a lifelong dream. They are buying a thousand-acre farm and plan to grow corn. They are not interested in bringing in any outside owners. The brothers are realistic and expect to work very long hours. Assuming the farm is organized as a general partnership, what are the advantages and disadvantages?

Describe some key characteristics of small business in Canada.

What issues should an entrepreneur consider when deciding whether to share ownership by forming a venture team?

Shares of stock in a private corporation are available for sale to the general public.

Self-employed Canadians account for about half of the total workforce.

An organization designed to avoid paying corporate tax by distributing all or most of their earnings to their shareholders is

Describe the role and responsibilities of the board of directors.

The majority of businesses in Canada have no employees (i.e., the only person is the business is the owner).

Two architects are considering forming a partnership. Both want a partnership agreement. All of the following should be part of their agreement except