Question

Answer the following questions in your OWN words:

1. If you were to start a business, which ownership form would you choose? What factors might affect your choice?

2. Why might an investor choose to become a partner in a limited partnership instead of purchasing the stock of an open corporation?

3. Discuss the following statement: “Corporations are not really run by their owners.”

4.  What kinds of services do not-for-profit corporations provide? Would a career in a not-for-profit corporation appeal to you?

5. Is growth a good thing for all firms? How does management know when a firm is ready to grow?

MAKE SURE TO ANSWER THEM ALL

Answer 1

Solution:-

1. If you were to start a business, which ownership form would you choose? What factors might affect your choice:-

I would choose sole proprietorship as a form of business ownership. First, they are simple to create. Anyone wanting to start a business can do so by obtaining the necessary licenses from state, county, and/or local governments. This form is normally the least expensive to establish. In addition, the owner has the total decision- making authority, can keep all profits remaining after expenses are paid, and may discontinue the sole proprietorship fairly easily if wanted.

2. Why might an investor choose to become a partner in a limited partnership instead of purchasing the stock of an open corporation:-

An investor may choose to become a partner in a limited partnership business instead of purchasing the stock of an open corporation because the owners of a partnership are usually its managers, especially in the case of a small business, the company is fairly easy to manage, and decisions can be made quickly without a lot of bureaucracy. This is not the case with corporations, which must have shareholders, directors, and officers, all of whom have some degree of responsibility for making major decisions.

3. Discuss the following statement: “Corporations are not really run by their owners.”:-

The statement “Corporations are not really run by their owners” is somewhat true depending on the type of corporation and depends on a tremendous degree on the size of the corporation in question. For example, most corporations’ stockholders exercise a great deal of influence through their right to elect the board of directors but that’s where their power stops. The board of directors appoints the officers, and the officers hire the employees.

4.  What kinds of services do not-for-profit corporations provide? Would a career in a not-for-profit corporation appeal to you:-

The kinds of services non-for-profit corporations provide are social, educational, religious, or other service rather than to earn a profit. I think I would eventually like to have a career in a non-for-profit organization. I reallywould like to work for one for veterans.

5. Is growth a good thing for all firms? How does management know when a firm is ready to grow:-

Not necessarily. There are many companies that experience tremendous growth only to suffer poorly, or even fail a short time later. Many fast growing companies lose sight of the realization that long-term, profitable growth is a by-product of effective management and planning.

Please Rate or comment if you have any doubt regarding this solution.