Chapter 6 Flashcards
Sole Proprietorship
A form of business ownership with a single owner who usually actively manages the company.
Partnership
A voluntary agreement under which two or more people act as co-owners of a business for profit.
General Partnership
A partnership in which all partners can take an active role in managing the business and have unlimited liability for any claims against the firm.
Articles of Incorporation
The document filed with a state government to establish the existence of a new corporation.
Limited Liability Company (LLC)
A form of business ownership that offers both limited liability to its owners and flexible tax treatment.
C Corporation
The most common type of corporation, which is a legal business entity that offers limited liability to all of its owners, who are called stockholders.
Stockholder
An owner of a corporation
Board of directors
The individuals who are elected by stockholders of a corporation to represent their interests.
Acquisition
A corporate restructuring in which one firm buys another
Merger
A corporate restructuring that occurs when to formerly independent business entities combine to form a new organization.
Horizontal merger
A combination of two firms that in the same category.
Vertical merger
A combination of firms at two different stages of production of a good or service.
Conglomerate merger
A combination of two firms that are in unrelated industries
Franchise
A licensing arrangement under which a franchisor allows franchisees to use its name, trademark, products, business methods and other property in exchange for monetary payments and other considerations.
Franchisor
The business entity in a franchise relationship that allows others to operate its business using resources its supplies in exchange for money and other consideration.
