Chapter 4 Flashcards
Legal documents that set forth the basic agreement between partners.
articles of partnership
A group of individuals, elected by stockholders to oversee the general operation of a corporation, who set the corporation’s long-range objectives.
board of directors
Stock whose owners have voting rights in the corporation, yet do not receive preferential treatment regarding dividends.
Common stock
An organization composed of individuals or small businesses that have banded together to reap the benefits of belonging to a larger organization.
cooperative (co-op)
A legal document that the state issues to a company based on information the company provides in the articles of incorporation.
corporate charter
A legal entity created by the state, whose assets and liabilities are separate from its owners.
corporation
Profits of a corporation that are distributed in the form of cash payments to stockholders.
dividends
A partnership that involves a complete sharing in both the management and the liability of the business.
general partnership
The process of becoming a public corporation by selling stock so that it can be traded in public markets.
initial public offering (IPO)
A partnership established for a specific project or for a limited time.
joint venture
A purchase in which a group of investors borrows money from banks and other institutions to acquire a company (or a division of one), using the assets of the purchased company to guarantee repayment of the loan.
Leveraged buyout (LBO)
Form of ownership that provides limited liability and taxation like a partnership but places fewer restrictions on members.
limited liability company
A business organization that has at least one general partner, who assumes unlimited liability, and at least one limited partner, whose liability is limited to his or her investment in the business.
limited partnership
The combination of two companies (usually corporations) to form a new company.
merger
Corporations that focus on providing a service rather than earning a profit but are not owned by a government entity.
nonprofit corporations
A form of business organization defined as an association of two or more persons who carry on as co-owners of a business for profit.
partnership
A special type of stock whose owners, though not generally having a say in running the company, have a claim to profits before other stockholders do.
preferred stock
A corporation owned by just one or a few people who are closely involved in managing the business.
private corporation
A corporation whose stock anyone may buy, sell, or trade.
public corporation
Corporations owned and operated by federal, state, or local government.
quasi-public corporations
A corporation that is taxed as though it were a partnership with restrictions on shareholders.
S corporation
Businesses owned and operated by one individual.
sole proprietorships
Shares of a corporation that may be bought or sold.
stock
The purchase of one company by another, usually by buying its stock.
acquisition
