What is the difference between local and superlocal co-ops?

Local = 1 organization in 1 county / superlocal: >1 county

Why are most farmers considered sole proprietors?

They manage their own finances and run their own operations

How do corporations raise capital after beginning their business?

They sell shares of stock in their company.

Why do partnerships tend to work well?

partners often have similar business interest and goals.

What distinguishes Article 2 and Article 4 of a partnership agreement?

Article 2: Finances/Article 4: Changing the Partnership

Which of the following is a disadvantage of a corporation?

It is more $$ to form than a proprietorship or partnerships.

Which is true of a partnership?

Profits and losses are divided as agreed.

Why are sole proprietorships so common?

No registration; can be 1 person selling a product

How do stocks make a profit for their holder?

Dividends are given to holder when profit is made

How can personal assets be lost with business assets?

Sole proprietorships operate with unlimited liability.

The first formal cooperative is assumed to be _____.

an insurance company developed by Benjamin Franklin

How can a partner avoid unlimited liability?

Become a silent partner; liable for their investment only

Why does the founder of a C-Corporation often become the CEO as well?

Most familiar with the Board of Directors & business

What is the difference between centralized and federated co-ops?

Federated: member is a co-op / Centralized = individuals

Why is failure a common fate for sole proprietorships?

There is only 1 person responsible for the entire business.

Why do LLCs have an operating agreement?

establish the rights of the partners

Which of the following is a disadvantage of a sole proprietorship?

May be difficult to raise enough capital to begin business.

Which best describes a regional cooperative?

serve many counties, an entire state, or a number of states

How do corporations differ from all other structures of business?

Corporations have a different tax structure.

Which of the following is not a characteristic of a sole proprietorship?

Lower taxes than any other form of business

How do stock and a board of directors relate?

more stock = more likely to be on the Board

What is the difference between and S and C-Corporation?

An S-Corporation keeps profit and a C-Corporation cannot.

What is the purpose of a purchasing, or supply, co-op?

It supplies producers with inputs.

What is a limited partnership?

One partner makes no decisions; only liable for $ invested

Why are co-ops formed?

for the aid of members in a particular service

What is a common problem in a partnership?

Homes are closely tied to the business.

Which is a disadvantage of a partnership?

Partners may not agree on decisions that need to be made.

How can death be a disadvantage to a sole proprietorship?

Death of the proprietor often ends the business.

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Structures of Ag Business

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Questions 55

Answers

1
What is the difference between local and superlocal co-ops?
Superlocal co-ops are the only ones to make a profit.
Superlocal = monopoly in local area / local = wider reach
Local co-ops are the only ones to make a profit.
Local = 1 organization in 1 county / superlocal: >1 county
2
Why are most farmers considered sole proprietors?
The individual farmer harvests their crops on their own.
Farmers don’t have to pay taxes on all of their production.
They manage their own finances and run their own operations
They hire help for finances, but do the rest alone
3
How do corporations raise capital after beginning their business?
They sell positions within the corporation.
They take out loans from the government.
They sell shares of stock in their company.
They acquire assets, like land, from supporters.
4
Why do partnerships tend to work well?
partners have been matched through online forums
partners often have similar business interest and goals.
The are responsible for each others salary
partners know each other very well
5
What type of business is chartered by a state and acts as a separate entity from its owners?
sole proprietorship
limited ownership
partnership
corporation
6
What distinguishes Article 2 and Article 4 of a partnership agreement?
Article 2: General Finances/Article 4: Salaries
Article 2: Changing the Partnership/Article 4: finances
Article 2: Finances/Article 4: Changing the Partnership
Article 2: Salaries/Article 4: General Finances
7
Which of the following is a disadvantage of a corporation?
It is more $$ to form than a proprietorship or partnerships.
A change of ownership need not affect management.
Raising capital through a sale of stocks and bonds.
Transfer of ownership is facilitated by the sale of stock.
8
Which type of cooperative sells farm supplies to its members?
service
purchasing
marketing
sustainable
9
Which is true of a partnership?
The partnership may not own property.
A written agreement of partnership terms is seldom needed.
Profits and losses are divided as agreed.
One partner contributes the money to start the business.
10
Why are sole proprietorships so common?
Government has encouraged people to own their own business
value individualism over cooperation and group dynamics
Low start-up costs; including a small registration fee
No registration; can be 1 person selling a product
11
Sole proprietorships can have _____.
more than one manager
much legal process in starting up
employees
more than one owner
12
A C corporation pays _________________ to the shareholders to distribute profits.
dividends
interest
shares
capital
13
How do stocks make a profit for their holder?
Dividends are given to holder when profit is made
The board of directors and CFO pay their stockholders.
Dividends are returned to stockholders with the most stock.
Stocks are self-generating profit makers
14
Which cooperative governing system has only other cooperatives as members?
federated cooperative
universal cooperative
centralized cooperative
mixed cooperative
15
How can personal assets be lost with business assets?
Insurance comps. make personal assets offset business ones
Sole proprietorships operate with limited liability.
The government will take away most profits in taxation.
Sole proprietorships operate with unlimited liability.
16
If a corporation does not have shareholders, it has _______ and is generally a private company.
proprietors
owners
members
partners
17
What is a form of business where two or more people go into business together?
corporation
limited ownership
partnership
sole
18
What is a business organization where the owners are the customers?
sole proprietorship
corporation
cooperative
partnership
19
How many people make decisions in a sole proprietorship?
all the board of directors
one
all the partners
all the stockholders
20
The first formal cooperative is assumed to be _____.
British tea growers led by the Earl Charles Grey
an insurance company developed by Benjamin Franklin
Babylonian harvest co-ops
Chinese credit unions
21
How can a partner avoid unlimited liability?
become a loud partner; take on business liability only
Partners never have unlimited liability
must be in bus. agreement that they want limited liability
Become a silent partner; liable for their investment only
22
Why does the founder of a C-Corporation often become the CEO as well?
Founder chooses CFO and the CFO chooses founder as the CEO
Founder must become the CEO
Most familiar with the Board of Directors & business
They have the money to become the CEO.
23
What is the most common form of a corporation?
S corporation
C corporation
closed corporation
limited liability corporation
24
What is the difference between centralized and federated co-ops?
Federated = few powerful members / Centralized: led by Pres.
Centralized = members are other co-ops / Federated = Individ
Federated: member is a co-op / Centralized = individuals
Centralized = many members / Federated = one member
25
Why is failure a common fate for sole proprietorships?
The proprietor cannot hire anyone and has to do work alone
There is only 1 person responsible for the entire business.
Startup costs are often too high for the owner to maintain.
Stress put on a sole proprietor often causes them to quit.
26
Why do LLCs have an operating agreement?
it helps the public understand the company better.
to establish the rights of the partners.
it helps others figure out how the LLC runs their machines.
establish the rights of the partners
27
Which of the following is a disadvantage of a sole proprietorship?
May be difficult to raise enough capital to begin business.
Sole proprietors are their own bosses.
Business expansion decisions are easy to accomplish.
The proprietor owns the assets and runs the business.
28
How many articles are in a partnership agreement?
5
9
3
7
29
The modern form of cooperatives was developed in _________ in the 19th century.
Britian
North America
Babylon
China
30
Which best describes a regional cooperative?
operate in more than one country, with headquarters in US
serve a major portion or most of the United States
operate in a single county in the United States
serve many counties, an entire state, or a number of states
31
What is the simplest form of business organization?
corporation
partnership
limited ownership
sole proprietorship
32
_____ are extra money made by a corporation that is given back to the shareholders.
Dividends
Multipliers
Profits
Stocks
33
A marketing co-op sells products and _____ returns.
maximizes
markets
minimizes
avoids
34
Why does the largest shareholder become the manager of a partnership?
They are the wealthiest and should be in charge.
They buy the position.
A board of directions has to elect them to that position.
They have the most at stake
35
How do corporations differ from all other structures of business?
Corporations have a much higher tax rate than others
Corporations do not pay taxes.
Corporations have a different tax structure.
Corporations are the only business to pay taxes.
36
Which of the following is not a characteristic of a sole proprietorship?
Lower taxes than any other form of business
Simplest form of business
Easily maintained
The oldest and most common form of business
37
Who receives all profits in a sole proprietorship?
the partners
the owner
the board of directors
the stockholders
38
How do stock and a board of directors relate?
less stock = more likely to be on the Board
more stock = less likely to be on the Board
more stock = more likely to be on the Board
more stock = more likely to be on the Board
39
An LLC prevents __________.
taxation
federal taxation
double taxation
triple taxation
40
In a lawsuit against a sole proprietor, how can the business owner be attacked if uninvolved?
the business owner was involved.
Limited Liability
Unlimited Liability
everyone in a sole proprietorship will be under fire
41
What is the difference between and S and C-Corporation?
An S-Corporation keeps profit and a C-Corporation cannot.
Both give profits back to shareholders; no difference.
A C-Corporation keeps profit and an S-Corporation cannot.
They both keep their profits; there is no difference.
42
What is the purpose of a purchasing, or supply, co-op?
It supplies consumers with inputs.
It supplies consumers with outputs.
It supplies producers with outputs.
It supplies producers with inputs.
43
What is a limited partnership?
one provides capital; no say; not liable
one does not provide $, no decision making
One partner makes no decisions; only liable for $ invested
one provides capital; has a say; only liable for $ invested
44
What service can a service co-op offer a strawberry grower?
Supplying pesticides to the grower
Advertising the berries to local communities
Marketing the berries
Cleaning the berries
45
Why are co-ops formed?
They meet the needs of the communities around the co-ops.
They are for the education of the public.
for the aid of members in a particular service
To become aware of businesses the co-ops are formed around
46
What is a common problem in a partnership?
Disagreements usually are over major issues.
Trust between the partners is solid.
Partners often have same goals for the business.
Homes are closely tied to the business.
47
A(n) ____ occurs when one person supplies capital and has no other role in the decision making.
limited partnership
limited venture
unlimited venture
unlimited partnership
48
Which is a disadvantage of a partnership?
Partners may not agree on decisions that need to be made.
Capital and knowledge of each partner is pooled.
Labor & mgt responsibilities can be divided among partners.
Risk of the business is shared.
49
The _____ has seven principles for the process of co-ops.
Rochdale System
Rossdale System
Rossdale Structures
Rochdale Structure
50
Who developed the modern for of the co-op?
The Canadians
The Chinese
The British
The Americans
51
How can death be a disadvantage to a sole proprietorship?
The business will have to cover the costs of the funeral.
There's no real disadvantage
Death of the proprietor often ends the business.
The business is liable for the death of the business owner.
52
What does limited liability mean?
The investor provides investment capitol, but has no vote.
The investor cannot lose more than the amount invested.
The investor cannot make more than the amount invested.
The investor can lose his personal assets and investments.
53
Who is responsible for business debts in a sole proprietorship?
the owner
the partners
the stockholders
the board of directors
54
How are sole proprietorships and LLCs/partnerships similar?
They both have as many owners as necessary.
They both operate on unlimited liability.
They both operate on limited liability.
They both have two owners.
55
What is the difference between a board of directors and a CEO or CFO?
CEO/CFO = daily decisions that do not affect the Board
CEO/CFO make large decisions; Board = day to day decisions
Board = large decisions; CEO/CFO = daily business decisions
Board makes decisions with the help of the CEO/CFO

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