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Business 120 > Chapter 4 > Flashcards

Chapter 4 Flashcards

0
Q

Sole proprietorships are most common in ….

A

Retail, service and agriculture

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1
Q

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

A

Sole proprietorship

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2
Q

Two main advantages of sole proprietorship

A

Simplicity and individual control

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3
Q

Holds a business owner personally responsible for all the debt of the business

A

Unlimited liability

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4
Q

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

A

Partnership

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5
Q

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

A

General partner

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6
Q

— is a person who invests money I’m a business but has no management responsibility or liability for losses beyond what he or she has in vested in the partnership

A

Limited partner

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7
Q

Refer to an agreement listing and explaining the terms of the partnership

A

articles of partnership

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8
Q

Partnership agreement should state

A 
Who makes financial decisions 
Partners duties 
Investment of each partner 
Profit or loss each receive or lose 
What happens is partner wants to dissolve or partner dies
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9
Q

Least popular form of business ownership

A

Partnership

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10
Q

An artificial person created by law with most of the legal rights of a real person including the right to start and operate a business, to buy or sell property, to barrow money, to sue or be sued, and to enter into binding contracts

A

Corporation

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11
Q

The shares of ownership of a cooperation.

A

Stock

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12
Q

Corporation who’s stock is owned by a relatively few people and is not sold to the general public

A

Closed corporation

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13
Q

A corp. who stock can be bought and sold to any individual

A

Open corporation

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14
Q

A corporation in the state in which it is incorporated

A

Domestic corporation

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15
Q

A corp. in any state which it does business exept the one in which it is incorporated

A

Foreign corporation

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16
Q

A corporation chartered by a foreign government and conducting business within the us

A

Alien corp.

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17
Q

Stock owned by individuals or firm who may vote on corporate matters but whose claims on profits and assets are subordinate to the claims of others

A

Common stock

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18
Q

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

A

Preferred stock

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19
Q

A distribution of earnings to the stockholders of a corporation

A

Dividend

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20
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 individuals

A

Proxy

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21
Q

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

A

Board of directors

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22
Q

Where to incorporate. Two main factors that help determaim where to incorporate are…

A

The cost of incorporating in one state compared to another

The advantages and disadvantages of each states corporate law and tax structure

23
Q

Articles of incorporation usually include

A 
Firms name + address 
Incorporaters name +address
Purpose of corporation 
Max amount and types of stock to be issued 
Rights/privledges of stockholders
Length of time the corp. is to exist
24
Q

The two basic types of stock are

A

Common + preferred

25
Q

Top governing body of a corporation and is elected by the stockholders

A

Board of directors

26
Q

The chairman of the board, president, executive Vice President, corporate secretary, treasurer, and any other top executive appointed by the board of directors

A

Corporate officers

27
Q

A feature of corporate ownership that limits each owners financial liability to the amount of money that he or she has paid for the corporations stock

A

Limited liability

28
Q

Both … Corp. and .. Corp. are taxed like a partnership.

A

LLC and S-corporation

29
Q

S-corporAtion

A

A corp. that is taxed as though it were a partnership

30
Q

To qualify for s-corp. a firm must meet the fallowing requirements

A 
No more than 100 stockholders 
Stock holders must be individuals estates or certain trusts 3) only one class of outstanding stock 4) domestic corp. 5)no alien stockholder 6) all stockholders must agree to from an S-corp.
31
Q

A form of business ownership that combines the benefits of a corporation and a partnership whil avoiding some of the disadvantages of both

A

LLC

32
Q

An 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

33
Q

A temporary association of invididuals or firms organized to preform a specific task that requires a large amount of Capitol

A

Syndicate

34
Q

The Purchase of one corporation by another

A

Merger

35
Q

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

A

Hostile takeover

36
Q

An offer to purchase the stock of a firm targeted for acquisition at a price just high enough to temp stockholders to sell their shares

A

Tender offer

37
Q

A technique used to gather enough stockholder votes to control a targeted company

A

Proxy fight

38
Q

Three types of growth by merger are

A

Horizontal merger
Vertical merger
Conglomerate merger

39
Q

…is a merger between two firms that make or sell similar products in similar markets

A

Horizontal merger

40
Q

Is a merger between two firms that operate at different levels in the production and marketing of a product

Generally one of the merging firms is either a supplier or a customer of the other

A

Vertical merger

41
Q

Merger that takes place between firms in completely different industries

A

Conglomerate merger

42
Q

Is essentially the same thing as a merger, but the term usually is use to describe a large corporations purchase of other corporations

A

Acquisition

43
Q

72% of all American business firms are

A

Sole proprietorships

44
Q

4 percent of total revenues come from this type of business ownership

A

Sole proprietorship

45
Q

It is allways a good idea to have s written agreement or…… When setting forth the terms of s partnership

A

Articles of partnership

46
Q

Is a carefully constructed guide for the person starting a business

A

Business-plan

47
Q

12 parts to a business plan

A

1) introduction 2)executive summary
3) benefits to the community 4) company and industry 5) management team 6) manufacturing/operations plan
7) labor force 8) marketing plan 9) financial plan 10) exit strategy 11)critical risks/assumptions 12) appendix

48
Q

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

A

Not-for-profit corporation

49
Q

Various charities, museums, private schools, colleges, and charitable organizations are organized as not-for-profit corporations
Primarily to ensure….

A

Limited liability

50
Q

Once non-profit corps meet specific Internal Revenue Service guidelines they can obtain…

A

Tax-exempt status

51
Q

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

A

LLC limited liability company

52
Q

In theory stockholders are able to control the activities of the corporation because they…

A

Elect the board of directors who appoint the corporate officers

53
Q

Small business

3 major categories
Production
Distribution
Service

A

Production 19%

Distribution 33%

Service 48%

54
Q

Small business VS not small

A

Sometimes it’s measured by employee count and sometimes by revenue

In manufacturing and mining anything less than 500 employees is small business

55
Q

70% of entrepreneurs are between the ages of what and what

A

24-44

30-34 is the highest with 21%

56
Q

3 major reasons why some entrepreneurs fail

A

Lack of Capitol

Lack of management

Over expansion

Business 120 (15 decks)

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