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Introduction to Business > Chapter 4 > Flashcards

Chapter 4 Flashcards

1
Q

A business that is owned (and usually operated) by one person

A

Sole proprietorship

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2
Q

Advantages of sole proprietorship

A
  1. Ease of startup and closure
  2. Pride of ownership
  3. Retention of all profits
  4. No special taxes
  5. Flexibility of being your own boss
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3
Q

Disadvantages of sole proprietorship

A
  1. Unlimited liability
  2. Lack of continuity
  3. Lack of money
  4. Limited management skills
  5. Difficulty of hiring employees
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4
Q

A legal concept that holds a business owner personally responsible for all the debts of a business

A

Unlimited liability

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5
Q

A voluntary association of two or more persons to act as a co-owners of a business for profit

A

Partnership

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6
Q

A person who assumes full or shared responsibility for operating a business

A

General partner

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7
Q

A person who invests money in a business but has no management responsibility or liability for losses beyond the amount they invested in the partnership

A

Limited partner

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8
Q

Advantages of a partnership

A
  1. Ease of start up
  2. Availability of capital and credit
  3. Personal interest
  4. Combined business skills and knowledge
  5. Retention of profits
  6. No special taxes
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9
Q

Disadvantages of a partnership

A
  1. Unlimited liability
  2. Management disagreements
  3. Lack of continuity
  4. Frozen investment
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10
Q

An artificial person, created by the law, with most of the legal rights of a real person

A

Corporation

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11
Q

The shares of an ownership or corportation

A

Stocks

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12
Q

A person who owns a corporations stocks

A

Stockholder

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13
Q

A corporation whose stock is not sold to the general public

A

Closed corporation

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14
Q

A corporation whose stock can be bought and sold by any individual

A

Open stock

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15
Q

A corporation in the state in which it is incorporated

A

Domestic corporation

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16
Q

A corporation in any state in which it does business except the one which it incorporated

A

Foreign corporation

17
Q

A corporation chartered by a foreign government and conducting business in the united states

A

Alien corporation

18
Q

The most basic form of corporate ownership and whose owners may vote on corporate policies

A

Common stock

19
Q

Stock owned by individuals or firms who usually do not have voting rights but whose claims on dividends are paid before those of common stock owners

A

Preferred stock

20
Q

A distribution of earnings to the stockholders of a corporation

A

Dividend

21
Q

A legal form listing issues to be decided at a stockholders’ meeting and enabling stockholders to transfer their voting rights to some other individual or indiviuals

A

Proxy

22
Q

The top governing body of a corporation, the members of which are elected by the stockholders

A

Board of directors

23
Q

The chairperson of the board, presidents, executive vice president, corporate secretary, treasurer, and any other top executive appointed by the board of directors

A

Corporate officers

24
Q

A feature of corporate ownership that limits each owner’s financial liability to the amount of money that they have paid for the corporation’s stock

A

Limited liability

25
Q

Advantages of a corporation

A
  1. Limited liability
  2. Ease of raising capital
  3. Ease of transfer of ownership
  4. Perpetual life
  5. Specialized management
26
Q

Disadvantages of a corporation

A
  1. Difficulty and expense of formation
  2. Government regulation and increased paperwork
  3. Conflict within the corporation
  4. Double taxation
  5. Lack of secrecy
27
Q

A corporation that is taxed as though it were a partnership

A

S Corporation

28
Q

A form of business ownership that combines the benefits of a corporation and a partnership while avoiding some of the restrictions and disadvantages of those forms of ownership

A

Limited liability company (LLC)

29
Q

A corporation organized to provide a social, educational, religious, or other service rather than to earn a profit

A

Not-for-profit organization

30
Q

A agreement between two or more groups to form a business entity in order to achieve a specific goal or to operate for a specific period of time

A

Joint venture

31
Q

A temporary association of individuals or firms organized to perform a specific task that requires a large amount of money

A

Syndicate

32
Q

The combining of two corporations or other business entities to form one business

A

Merger

33
Q

A situation in which the management and board of directors of a firm targeted for acquisition disapprove of the merger

A

Hostile takeover

Introduction to Business (4 decks)

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