Khalil founded the "Taco Factory" 20 years ago as a family-oriented restaurant. Over the years as they grew the business, he incorporated and sold stock to outside investors. Recently the stockholders voted to seek liquor licenses and to sell beer and hard liquor in the restaurants. Khalil opposed this, citing the history of the restaurant's "family" environment, but was voted down. Khalil has experienced which drawback of the corporate form of ownership? The potential for diminished managerial incentives. O The inability to accumulate capital. O The potential loss of control. Legal requirements and red tape.
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- After working for In the Kitchen remodeling business for several years, Terry and Phyllis decided to go into business for themselves and formed the Kitchens Just for You partnership. Three years ago, they admitted Connie as a partner and recognized goodwill at that time because of her good client list for planned kitchen makeovers. However, they were not able to gain a sufficient market for new customers and on September 1, 20X9, they agreed to dissolve and liquidate the business. They decided on an installment liquidation to complete the projects already initiated. The balance sheet, with profit and loss-sharing percentages at the beginning of liquidation, is as follows: KITCHENS JUST FOR YOU Balance Sheet September 1, 20X9 Assets Liabilities and Equities Cash $ 6,000 $ 39,000 Accounts Payable Receivables 68,000 Connie, Loan 14,000 Terry, Loan 8,000 Terry, Capital 11,500 (30%) Inventory 48,000 37,000 Phyllis, Capital (60%) Goodwill 22,000 50,500 Connie, Capital (10%) Total Assets $…ut of uestion A purchased 2 Common shares of the corporation her brother created to operate his electronics store, B has 100 shares, and another shareholder C has 49 shares. When A's LED television breaks down, she goes to B's store and asks to take one from the store to use while hers is being repaired. When B refuses A reminds him that as a shareholder, she is an owner of the Corporation and is entitled to take the television in the Corporation's store. In this scenario: O a. "A's," B's", and "C's" ownership interest as shareholders in the Corporation does not entitle any of them to take the Corporation's assets for personal use O b. "A" is not entitled to take the television for personal use but B and the other shareholder can because they own more shares in the Corporation O c. "A" is entitled to take the television for personal use because she is an owner of the Corporation O d. A" owning shares in the Corporation does not make her an owner of the CorporationDavies FashionsRose, Jean and Dorothy have been trading as a partnership for the last three years. However, their accountant advised them to convert to a limited company in order to reduce their tax liability.Following this advice they incorporated a company, Davies Fashions Ltd, with Rose, Jean and Dorothy as the sole directors and shareholders. They commenced trading as the new company some thirteen months ago. The company manufactures high quality fashiongoods for the more mature end of the female market and deliberately targets customers who used to shop at major high street retailers but no longer do so.They pride themselves on the fact that all their products are hand-finished, using local staff, a large proportion of which are family and friends of the directors. The company secretary is Edward, who has responsibility for all compliance issues. He drew up the Memorandum and Articles of Association and registered the company at Companies House, in accordance with all statutory…
- Anita and Duncan had been partners for many years in a mercantile business. Their relationship deteriorated to the point at which Anita threatened to bring an action for an accounting and dissolution of the firm. Duncan then offered to buy Anita’s interest in the partnership for $250,000. Anita refused the offer and told Duncan that she would take no less than $360,000. A short time later, James approached Duncan and informed him he had inside information that a proposed street change would greatly benefit the business and that he, James, would buy the entire business for $1 million or buy a one-half interest for $500,000. Duncan made a final offer of $350,000 to Anita for her interest. Anita accepted this offer, and the transaction was completed. Duncan then sold the one-half interest to James for $500,000. Several months later, Anita learned for the first time of the transaction between Duncan and James. What rights, if any, does Anita have against Duncan?2. Bill lives in Macon, Georgia. However, he just bought fifty shares of stock in a large business headquartered in Chicago, Illinois. Bill's stock gives him a small piece of ownership in the business at limited financial risk. It sounds like Bill has invested in a A. sole proprietorship. B. corporation. C. partnership. D. franchise.Because Natalie has been successful with Cookie Creations and Curtis has been just as successful with his coffee shop, they both conclude that they could benefit from each other's business expertise. Curtis and Natalie next evaluate the different types of business organization, and because of the advantage of limited personal liability, decide to form a new corporation. Curtis has operated his coffee shop for 2 years. He buys coffee, muffins, and cookies from a local supplier. Natalie's business consists of giving cookie-making classes and selling fine European mixers. The plan is for Natalie to use the premises Curtis currently rents as a location for her cookie-making classes and demonstrations of the mixers that she sells. Natalie will also hire, train, and supervise staff hired to bake cookies and muffins sold in the coffee shop. By offering her classes on the premises, Natalie will save on travel, and the coffee shop will provide one central location for selling the mixers.…