Exam 9: The Organizational Plan

Both partnerships and proprietorships serve as nontaxable conduits of income for their owners.

When it comes to decision making,in a limited partnership:

The S corporation can deduct most fringe benefits for shareholders.

In a limited liability company,every member has limited liability.

In an S Corporation,ownership can be freely transferred as long as the buyer is an individual.

Discuss the six main functions of a board of directors.

The hiring process is one area of business operation that the entrepreneur should not cut back on to save time.

Corporations are not able to distribute profits to shareholders.

An S Corporation combines the tax advantages of the partnership and the corporation.

The limited partners in a venture share control of day-to-day operations with the general partners.

The difference between a board of directors and a board of advisors is that:

Shares of stock are issued to members of a limited liability company.

In a limited liability company:

Eric Ryan and Adam Lowry started Method Products because:

Corporations distribute profits primarily through dividends.

The limited liability company is the only form of organization that allows members to share liability.

The design of the organization will be the entrepreneur's formal and explicit indication to the members of the organization as to what is expected of them.Typically these expectations can be grouped into five areas,identify and describe them. A.Organization structure.This defines members' jobs and the communication and relationship these jobs have with each other.These relationships are depicted in an organization chart. B.Planning,measurement,and evaluation schemes.All organization activities should reflect the goals and objectives that underlie the venture's existence.The entrepreneur must spell out how these goals will be achieved (plans),how they will be measured,and how they will be evaluated. C.Rewards.Members of an organization will require rewards in the form of promotions,bonuses,praise,and so on.The entrepreneur or other key managers will need to be responsible for these rewards. D.Selection criteria.The entrepreneur will need to determine a set of guidelines for selecting individuals for each position. E.Training.Training,on or off the job,must be specified.This training may be in the form of formal education or learning skills.

Which of the following is not one of the main functions of the management team according to text?

When hiring employees for the venture,the entrepreneur should consider the candidate's skills and abilities and avoid considering the individual's personality.

Discuss the main advantages of an LLC over an S-Corp.