chapter 5- Forms of ownership

Question 1

define sole propietrorship

Answer 1

business owned by one person

Question 2

define partnerships

Answer 2

• company owned by two or more people but it is not a corporation

Question 3

2 types of partnerships

Answer 3

1. general: all can make decisions
2. limited: one or more persons act as general partners and remain as limited partners.

Question 4

advantages & disadvantages of sole propietrorship

Answer 4

adv:
- simplicity: easy to establish
- single layer of taxation
- make own decisions
- fewer limitations on personal income
- personal satisfaction

dvt:
- financial liability: legal damage are covered by single owner
- demands on owner
- limted managerial perspective
- resource limitations
- finite life supply

Question 5

advantages & disadvantages of partnerships

Answer 5

adv:
- simplicity
- single layer taxation
- more resources
- cost sharing
- more experiences
- longevity

dvt:
-unlimited liability
- conflict

Question 6

describe the partnership agreement

Answer 6

includes:
1. type of partnership
2. investment percentages
3. profit sharing percentages
4. management responsibilities

Question 7

describe corporations

Answer 7

• legal entity that has the power to own property and conduct buisness

Question 8

advantages and disadvantages of corporations

Answer 8

adv:
- raise capital
- liquidity
. longevity
- limited liability

dsv:
- cost and complexity
- reporting requirements
- loss of control
- double taxation

Question 9

types of corporations

Answer 9

1. S corporation: capital raising options + limited liability with federal taxation advantages of partnerships
2. LLC (limited liability company): number of shareholders is not restricted or members participation in management.
3. benefit corporation: profit-seeking corporation with a socil or enviormental goal.

Question 10

define corporate governance

Answer 10

• policies, procedures and relationship’s in place to have a succesful legal operation in enterprise
• RESPONSABILITIES OF BOARD OF DIRECTORS

Question 11

define board of directors

Answer 11

• grouo of professionals chosen by shareholders to represent company.

Question 12

define proxy

Answer 12

• document authorizing another person to vote in behalf of a shareholder in a corporation.

Question 13

define shareholder activism

Answer 13

• activities that influence decision making in areas like strategy planning and social responsibility.

Question 14

define corporate officers

Answer 14

• top excutives running company

Question 15

define chief executive officer (CEO)

Answer 15

highest level in company

Question 16

merger definition

Answer 16

two companies combining to create a single company

Question 17

acquisition definition

Answer 17

one company buys a controlling interest in voting stock of another company

Question 18

define hostile takeover

Answer 18

acquisition of another company against wishes of management

Question 19

define leveraged buyout (LBO)

Answer 19

acquisition of company´s public trades stocks using borrowed funds, intending to use assets to pay back loans used to acquire company.

Question 20

advantages & disadvantages of mergers

Answer 20

• adv
• increase buying power
• increase revenue
• gain access to new expertise

dvt:
- need to decide who will be in charge when they join forces.
- deal with layoffs
- might need to rebuilt some software
- organizational culture should bne harmonized

Question 21

types of mergers

Answer 21

1. vertical: different stages but in same industry
   eg: lumber suppliers+furniture maker
2. horizontal: different companies at the same level
   eg lumber supplier+ leather supplier
3. conglomerate merger: companies in unrelated industries
   fast food+ shoes

Question 22

define spin offs

Answer 22

company deciding to divide parts of company in seperate companies.

Question 23

why do companies apply spin-offs

Answer 23

• increasing shareholder value
• giving parts of a company more freedom to pursue startegic goals
• reinforcing firms straetegy

Question 24

define startegic alliance

Answer 24

• long-term partnership between companies so they together devleop and sell products

Question 25

define joint venture

Answer 25

• buisness agreement in which two or more companies agree to join their reosurces for the purpose of accomplishing a specific taski

Question 26

what is big data

Answer 26

• data sets analyzed to find improtant trends

Question 27

The five VS

Answer 27

• volume
• velocity
• variety

Question 28

analuystics definition

Answer 28

tools (data mining, text mining and predictive analysis) used to analyze big data