Chapter3

Question 1

Proprietorship

Answer 1

A business venture owned by an individual who is personally liable for the ventures liabilities.

Question 2

Unlimited liability

Answer 2

Personal obligation to pay a ventures liabilities, not covered by the ventures assets.

Question 3

Partnership

Answer 3

Business venture owned by two or more individuals who are jointly and personally liable for the ventures liabilities.

Question 4

Partnership agreement

Answer 4

An agreement that spells out how business decisions are to be made, and how profits and losses are to be shared.

Question 5

Joint liability

Answer 5

Legal action treats, all partners equal as a group.

Question 6

Joints and several liability

Answer 6

Subsets of partners can be the object of legal action related to the partnership.

Question 7

Limited partnership

Answer 7

Certain partners liabilities are limited to the amount of their equity contribution.

Question 8

Corporation

Answer 8

A legal entity that separates personal assets of the owners, Called shareholders, from the assets of the business.

Question 9

Limited liability

Answer 9

Credators can seize the corporations assets, but have no recourse against the shareholders, personal assets.

Question 10

Corporate charter

Answer 10

Legal document that establishes the corporation.

Question 11

Articles of incorporation

Answer 11

Basic legal declarations contained in the corporate charter.

Question 12

Corporate bylaws

Answer 12

Rules and procedures established to covering the corporation.

Question 13

S corporation

Answer 13

Corporate form of organization that provides unlimited liability for shareholders; plus corporate income is taxed as personal income to the shareholders.

Question 14

Limited liability company LLC

Answer 14

A company owned by shareholders with limited liability; its earnings are taxed at the personal income tax rates of the shareholders.

Question 15

Intellectual property

Answer 15

Ventures and tangible assets and human capital, including inventions that can be protected from being freely used or copied by others.

Question 16

Patents

Answer 16

Intellectual property rides granite for inventions that are usually, novel, and non-obvious.

Question 17

Trade secrets

Answer 17

Intellectual property rides in the form of inventions and information, not generally known to others, they convey economic advantages to the holders.

Question 18

Trademarks

Answer 18

Intellectual property rights to allow firms to differentiate their products and services through the use of unique marks.