Advanced Business Type

Question 1

Who manages the organization?

Answer 1

CEO

Question 2

What does the CFO do?

Answer 2

Manages the financial aspect of the organization

Question 3

What does the President do?

Answer 3

Directs and evaluates all other officers

Question 4

Other executives jobs?

Answer 4

They develop a strategic plan for the organization

Question 5

What are the 3 Key Documents for a business?

Answer 5

Articles of Incorporation/organization
Corporate Bylaws
Annual Reports

Question 6

What is a Limited Liability Company? (LLC)

Answer 6

Owner is not personally liable for the company’s debts
Example- small businesses
Beneficial Owners will be identified

Question 7

What is a Corporation?

Answer 7

Businesses that have a separate
legal existence from their owners
- they will have shareholders (public or private)

Question 8

What is a Publicly Traded Company?

Answer 8

Corporation whose shares are openly traded on markets or exchanges
-No shareholders are identified
-Controlling party will be identified

Question 9

What is a Partnership?

Answer 9

A formal arrangement by two or more parties to manage or operate a business and share its profits

Question 10

What is a Limited Partner?

Answer 10

“silent partner”- one party is not involved in the day-to-day operations of the business

Question 11

Equity vs Non Equity Partner?

Answer 11

Equity: invest their resources, be
it capital, skills share of ownership and
profits (will often have to
buy-in to the firm), or
experience,

Non Equity: entitled to a fixed share of
partnership profits
do not buy in to the firm
and get paid salaries
is not ownership of the
company

Question 12

What is a General Partnership?

Answer 12

Two or more individuals who share management and profits
- Default mode of ownership for multiple owner businesses
Does NOT require filing with any state in the US

Question 13

What is a Limited Partnership?

Answer 13

Managed and run solely by general partners
only liable for their invested amount

Question 14

What are funds?

Answer 14

A pool of money allocated for specific reason/purpose

Question 15

Common types of funds?

Answer 15

Pension, endowment, insurance, foundation

Question 16

What is Private Equity?

Answer 16

They will invest in private companies that are established
Often organized as limited partnerships
tend to buy 100 percent of the company

Question 17

What is Venture Capital?

Answer 17

They will invest in start up companies
Often take a 50% or less equity interest in the company
Often structured as partnerships with the general partner serving as the
manager and investment advisor

Question 18

What does SPV stand for?

Answer 18

Special Purpose Vehicle

Question 19

What is an SPV for?

Answer 19

Legal entity created for a specific purpose
Often used by companies to isolate the parent company from
financial risk
Can be formed as a limited partnership, a trust, a corporation, or a
limited liability corporation

Question 20

Different kinds of NGOs?

Answer 20

Charities, Nonprofits, Foundations, Charitable Trust

Question 21

Key Charity Terms?

Answer 21

Sponsorships- Businesses donating money to the charity to promote the cause
Partnerships- Working with other organizations for a common interest
Financial Beneficiary-Entity/individual receiving funds from the charity

Question 22

Difference between Public Charity and Private Foundation?

Answer 22

PC: Receives income from general public
support is broad

PF: Single major source of funding
Makes grants to other charitable organizations
Does not directly operate
charitable programs

Question 23

True or False: For international charities, each country has their own laws for setting up non profit entity types

Answer 23

True