Chapter 8 Vocab Flashcards
Managers and other key persons who give a company its general direction
Management team
An interconnected system of relationships with other people
Social Network
The advantage created by an individual’s connections in a social network
Social Capital
A powerful sense of obligation to repay in kind what another has done for or provided to us
Reciprocation
A business owned by one person, who bears unlimited liability for the enterprise
Sole Proprietorship
Liability on the part of an owner that extends beyond the owner’s investment in the business
Unlimited Liability
A legal entity formed by two or more co-owners to operate a business for profit
Partnership
A document that states explicitly the rights and duties of partners
Partnership Agreement
The liability of each partner resulting from any one partner’s ability to legally bind the other partners
Joint and Several Liability
A business organization that exists as a legal entity and provides limited liability to its owners
Corporation
A business organization that is recognized by the law as having a separate legal existence
Legal Entity
An ordinary corporation taxed by the federal government as a separate legal entity
C Corporation
A document that establishes a corporation’s existence
Corporate Charter
A document specifying the number of shares owned by a stockholder
Stock Certificate
The right of stockholders to buy new shares of stock before they are offered to the public
Preemptive Right
A situation in which the courts conclude that incorporation has been used to perpetuate a fraud, skirt a law, or commit some wrongful act and thus remove liability protection from the corporate entity
Piercing the corporate Veil
A partnership with at least one general partner and one or more limited partners
Limited Partnership
A partner in a limited partnership who has unlimited personal liability
General Partner
A partner in a limited partnership who is not active in its management and has limited personal liability
Limited Partner
A type of corporation that offers limited liability to its owners and passes taxable income or losses on to stockholders
S corporation (Subchapter S Corporation)
A form of organization in which owners have limited liability but pay personal income taxes on business profits
Limited Liability Company
A form of corporation that shields owners from liability and is set up for individuals in certain professional practices
Professional Corporation
A form of corporation for enterprises established to serve civic, educational, charitable, or religious purposes, not for generation of profits
Nonprofit Corporation
Verification of whether a nonprofit organization is staying true to its stated purpose
Organizational Test
An organizational relationship that links two or more independent business entities in a common endeavor
Strategic Alliance
The governing body of corporation elected by stockholders
Board of Directors
A group that serves as an alternative to a board of directors, acting only in an advisory capacity
Advisory board
