Chapter 16 Flashcards
A number assigned by the Internal Revenue Service which is used for income tax purposes
Employer identification number (EIN)
A business owned by one person
Sole proprietorship
A situation in which the owner of a business is responsible to pay the business debts out of personal assets
Unlimited liability
A situation in which a business’s life span or existence is determined by the owner’s life span or the owner’s decision to terminate the business
Limited life
A business owned by two or more persons
Partnership
A written document that states how the partnership will be organized
Partnership agreement
A business partner who has decision making authority, takes an active role in the operation of the business, and has unlimited liability for all loses or debts of the partnership
General partner
A business partner who does not take an active role in decision making or in running the business
Limited partner
A business organization that operates as a legal entity that is separate from its owners and is treated by law as if it was an individual person
Corporation
The application to operate as a corporation
Articles of incorporation
The rules by which a corporation will operate
Corporate by laws
A license to operate a corporation
Corporate charter
A group of individuals who are responsible for overseeing the general affairs of the corporation
Board of directors
