Chapter 5 Slideshow Vocab Flashcards
Sole Proprietorship
A business owned, and usually managed, by one person.
Partnership
Two or more people legally agree to become co-owners of a business.
Corporation
A legal entity with the authority to act and have liability part from its owners.
General Partnership
All owners share in operating the business and in assuming liability for the business’s debts.
Limited Partnership
A partnership with one or more general partner and one or more limited partners.
General Partner
An owner (partner) who has unlimited liability and is active in managing the firm.
Limited Partner
An owner who invests money in the business, but enjoys limited liability. Limited Liability means that liability for the debts of the business is limited to the amount the limited partner puts into the company; personal assets are not at risk.
Master Limited Partnership
A partnership that looks much like a corporation, but is taxed like a partnership and thus avoids the corporate income tax.
Limited Liability Partnership
Limits partners’ risk of losing their personal assets to the outcomes of only their own acts and omissions and those of people under their supervision.
Conventional Corporation
A state-chartered legal entity with authority to act and have liability separate from its owners (its stockholders).
S Corporation
A unique government creation that looks like a corporation, but is taxed like sole proprietorships and partnerships.
Limited Liability Company
Similar to and S corporation, but without the eligibility requirements.
Merger
The result of two firms joining to form one company.
Acquisition
One company’s purchase of the property and obligations of another company.
Leveraged buyout
An attempt by employees, management, or a group of private investors to buy out the stockholders in a company.
