Chapter 5 Flashcards
Sole Proprietorship
A business owned, and usually managed, by one person.
Corporation
A legal entity with authority to act and have liability separate from its owners.
Limited Liability
A legal status where a person’s financial liability is limited to a fixed sum, most commonly the value of a person’s investment in a company or partnership.
Types of Mergers
Vertical merger, Horizontal merger, Conglomerate merger.
Franchise
A type of license that a party (franchisee) acquires to allow them to have access to a business’s (franchisor) proprietary knowledge, processes, and trademarks in order to allow the party to sell a product or provide a service under the business’s name.
Limited Liability Corporation
A company similar to an S corporation but without the special eligibility requirement.
Partnership
A legal form of business with two or more owners.
Unlimited Liability
The responsibility of business owners for all of the debts of the business.
Merger
The result of two firms forming one company.
Acquisition
One company’s outright purchase of the property and obligations of another company.
S corporation
A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships.
Convention (C) Corporation
A state-chartered legal entity with authority to act and to have liability separate from its owners.
General Partnership
A partnership in which all owners share in operating the business and in assuming liability for the business’s debt.
Limited Partnership
A partnership with one or more general partners and one or more limited partners.
