Advanced Business Type Flashcards
Who manages the organization?
CEO
What does the CFO do?
Manages the financial aspect of the organization
What does the President do?
Directs and evaluates all other officers
Other executives jobs?
They develop a strategic plan for the organization
What are the 3 Key Documents for a business?
Articles of Incorporation/organization
Corporate Bylaws
Annual Reports
What is a Limited Liability Company? (LLC)
Owner is not personally liable for the company’s debts
Example- small businesses
Beneficial Owners will be identified
What is a Corporation?
Businesses that have a separate
legal existence from their owners
- they will have shareholders (public or private)
What is a Publicly Traded Company?
Corporation whose shares are openly traded on markets or exchanges
-No shareholders are identified
-Controlling party will be identified
What is a Partnership?
A formal arrangement by two or more parties to manage or operate a business and share its profits
What is a Limited Partner?
“silent partner”- one party is not involved in the day-to-day operations of the business
Equity vs Non Equity Partner?
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
What is a General Partnership?
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
What is a Limited Partnership?
Managed and run solely by general partners
only liable for their invested amount
What are funds?
A pool of money allocated for specific reason/purpose
Common types of funds?
Pension, endowment, insurance, foundation
What is Private Equity?
They will invest in private companies that are established
Often organized as limited partnerships
tend to buy 100 percent of the company
What is Venture Capital?
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
What does SPV stand for?
Special Purpose Vehicle
What is an SPV for?
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
Different kinds of NGOs?
Charities, Nonprofits, Foundations, Charitable Trust
Key Charity Terms?
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
Difference between Public Charity and Private Foundation?
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
True or False: For international charities, each country has their own laws for setting up non profit entity types
True
