Chapter 3 Flashcards
small business administration (SBA)
government agency charged with assisting small businesses
small business
independently owned business that has relatively little influence in its market
entrepreneur
businessperson who accepts bothe the risks and the opportunities involved in creating and operating a new business venture
entrepreneurship
process of seeking business opportunities under conditions of risk
business plan
document in which an entrepreneur summarized his or her business strategy for a proposed new venture and how that strategy will be implemented
franchisee
arrangement in which a buyer (franchisee) purchases the right to sell the good or service of the seller (franchiser)
venture capital company
group of small investors who invest money in companies with rapid growth potential
small-business investment company (SBIC)
government-regulated investment company that borrows money from the SBA to invest in or lend to a small business
small business development center (SBDC)
SBA program designed to consolidate informaiton from various disciplines and make it available to small businesses
sole proprietorship
business owned and usually operated by one person who is responsible for all of its debts
unlimited liability
legal principle that holds owneers responsible for paying off all debts of a business
general partnership
business with two or more owners who share in both the operation of the firm and the financial responsiblity for its debts
limited partnership
type of partnership consisting of limited partners and a general (or active) partner
general (or active) partner
partner who actively manages a firm and who has unliimited iabilty for its debts
master limited partnership
form of ownership that sells shares to investors who receive profits and that pays taxes in income from profits
cooperative
form of ownership in which a group of sole proprietorships and/or partnerships agree to work together for common benefits
corporation
business that is legally considered an entity separate from its owners and is liable for its own debts; owners’ liabilities extended to the limits of their investments
limited liability
legal principle holding investors liable for a firm’s debts only to the limits of their personal investments in it
tender offer
offer to buy shares made by a prospective buyer directly to a target corporation’s shareholders, who then make individual decisions about whether to sell
double taxation
situation in which taxes may be payable both by a corporation on its profits and by shareholders on dividend incomes
closely held (or private) corporation
corporation whose stock is held by only a few people and is not available for sale to the general public
publicly held (or public) corporation
corporation whose stock is widely held and available for sale to the general public
s corporation
hybrid of a closely held corporation and a partnership, organized and operated like a corporation but treated as a partnership for tax purposes
limited liability corporation (LLC)
hybrid of a publicly held corporation and a partnership in which owners are taxed as partners but enjoy the benefits of limited liablity
professional corporation
form of ownership allowing professionals to take advantage of corporate benefits while granting them limited business liability and unlimited professional liability
miltinational (or transnational) coporation
form of coporation spanning national boundries
corporate governance
roles of shareholders, directors, and other managers in corporate decision making and accountability
stockholder (or shareholder)
owner of shares of stock in a corporation
board of directors
governing body of a corporation that reports to its shareholders and delegates power to run its day-to-day operations while remaining responsible for sustaining its assets
officers
top management team of a corporation
cheif executive officer (CEO)
top manager who is responsible for the overall performance of a corporation
strategic alliance
strategy in which two or more organizations collaborate on a project for mutual gain
joint venture
strategic alliance in which the collaboration involves joint ownership of the new venture
merger
union of two corporations to form a new corporation
acquisition
purchase of one company by another
divestiture
strategy whereby a firm sells one or more of its business units
spin-off
strategy of setting up one or more coporate units as new, independent corporations
