| A | B |
|---|
| Weekly or monthly payments made by the owner of the franchise to the settler of the franchise | royalty fees |
| A business owned exclusively by one person | sole proprietorship |
| Group of people who meet several times a year to make important decisions affecting the company | board of directors |
| A unit of ownership in a corporation | share of stock |
| A person who sells businesses for a living | business broker |
| Fee the franchise owner pays in return for the right to run the franchise | initial franchise fee |
| A business owned by two or more people | partnership |
| Distributions of profits to shareholders by corporations | dividends |
| A legal agreement that gives an individual the right to market a company's product or services in a particular area | franchise |
| A business with the legal right of a person and which may be owned by many people | corporation |
| Costs associated with beginning a business | start-up costs |
| The amount owed to others | liability |
| The amount paid for ads | advertising fee |
| Form a corporation | incorporate |
| Taxed like a partnership | S corporation |
| A person who can estimate the value of a business | valuator |
| T/F: Because prior records do not exist, financial planning is more difficult when you buy an existing business than when you start from scratch. | false |
| T/F: Senior management positions in family businesses may be held by family members who do not make good business decisions. | true |
| T/F: A disadvantage of buying an existing business is that it might be poorly located. | true |
| T/F: A valuator can help determine a price to offer for a business and can write a sales contract. | false |
| T/F: Unlike buying an existing business or franchise, starting your own business does not have any disadvantages. | false |
| T/F: Before purchasing a franchise, you should find out what happens if you want to cancel the agreement. | true |
| T/F: A franchisee is a person who purchases a franchise agreement. | true |
| T/F: A corporation's senior officers decide how much should be paid out in dividends. | false |
| T/F: An S corporation's profits are taxed only as individual income, not as corporate income. | true |
| T/F: The government exercises very little control over sole proprietorships. | true |
| T/F: The owners of a corporation are all those people who own shares of stock in the corporation. | true |
| T/F: Double taxation of profits means that a corporation pays taxes both on its income and on the amount it pays out in dividends. | false |
| T/F: A partnership agreement identifies the investment contributed by each partner and the duration of the partnership. | true |
| T/F: You must file a written description of your business with the government when you raise money for a sole proprietopship. | false |
| T/F: There are two main types of business ownership. | false |
| T/F: While entering a family business can give entrepreneurs a sense of pride and satisfaction, there usually do not enjoy working with relatives. | false |
| Franchises must offer only certain products or services and must charge prices set by the franchisor. | true |
