Forms Of Business Ownership Flashcards
What explain soleproprietorship?
Has one owner and liabilities are unlimited with the individuals income taxed due to single ownership usually easy to conduct business with typically fewer than 50 people
Give 4 advantages of sole proprietorship
Formation is easy and cost-effective
Secrecy is possible minimising competitors gaining traits secrets
All profit belong to the owner
It can be dissolved easily
Flexibility and control of the business
Give four disadvantages of sole proprietorship
The owner has unlimited liabilities
External funds are difficult to find
Owner must have divers skills from management finance and marketing
Survival is tied to the owners life and ability to work
Qualified employees are hard to get a larger companies for better packages
What is a partnership?
Has two or more owners and the liabilities are somewhat limited. It is easy for two individuals to conduct business. The individuals income is taxed and profits are shared between partners. 
What are the two types of partnership?
General partnership
Limited partnership
What is a general partnership?
Involves a complete sharing in management of the business each having unlimited liabilities for debts of the business usually made between lawyers accountants and architects
What is the limited partnership?
Has at least one general partner who assumes unlimited liability and at least one partner whose liabilities is limited to their investment. Exist for risky investment project where great loss can be experienced
Give 4 advantages of a partnership
Partnership are easy to organise
Partnership have high credit rating due to combined wealth
Combined knowledge and skills from partners
Small partnership can react quickly to changes and decision-making
Give 4 disadvantages of partnerships
Have unlimited liability
Partnership is terminated if a partner dies or withdrawals
Difficult to sell a partnerships interest at a fair price
Distribution of profits do not correctly reflect amount of work done
Partners are responsible for each other decisions and bad decisions by one partner maybe risky leading to dispute
What is a corporation?
is a legal entity that is separate from its owners (shareholders) One of the key features of a corporation is limited liability, which means that the shareholders’ personal assets are generally protected from the company’s debts and liabilities.
What are stocks
Stocks, also known as shares or equities, represent ownership in a corporation. When you buy stocks of a company, you essentially own a portion of that company.
What are dividends?
Dividends are payments made by a corporation to its shareholders, usually as a distribution of profits. They can be paid in cash or additional shares of stock.
What are the 4 types of corporation?
Domestic corporation
Foreign corporation
Private corporation
Public corporation
What is a domestic corporation?
A corporation that conducts business in the state in which it is chartered
What is a foreign corporation?
A corporation that contact conduct business outside the state in which it is charted
What is the private corporation?
owned by a relatively small number of shareholders and does not offer its shares to the general public through public stock exchanges. Ownership is often closely held by founders, family members, or a small group of investors.
What is a public corporation?
is a company whose ownership is dispersed among the general public in the form of publicly traded shares of stock. These shares are bought and sold on stock exchanges, Public corporations are subject to extensive regulatory requirements and are required to disclose financial information and other relevant data to the public on a regular basis.
What are the 2 types of public corporations?
Quasi public corporation
Nonprofit corporation
What is a quasi corporation
is an organization that is created by the government but operates independently and is not directly under government control. These corporations often provide essential services that are considered to be in the public interest, such as transportation,
What is a nonprofit corporation?
These organisations focus on providing a service rather than earning a profit but they are not owned by the government
List 4 advantages of a corporation
Limited liabilities providing protection to shareholders
Shareholders can sell or trades dogs to other people without causing termination
Last longer exceeding beyond the lifespan of the owner
Raising money is easier
Business expansion is easier
List 4 disadvantages of a corporation
The company is taxed separately and owners a texed for their dividends as well
Forming a corporation can be expensive
Information must be available to Onur through reports
Competitors can access financial reports
Complying with security law takes time
Employment owner, separation
What is initial public offering IPO?
It refers to the process by which a private company offers shares of its stock to the public for the first time, thus transitioning from being privately held to being publicly traded.
What is the limited liability company LLC?
is a business structure that combines the features of a corporation and a partnership (or sole proprietorship, Like a corporation, an LLC provides limited liability protection to its owners,
What is a joint venture?
Is a business arrangement in which two or more parties agree to collaborate and combine their resources, expertise, and capital to undertake a specific project or pursue a specific goal.
What is the cooperative co-op?
Is a type of business organization owned and operated by small businesses or individuals for their mutual benefit. In a cooperative, individuals or businesses come together to pool their resources, such as capital, labor, or expertise, to achieve common goals.
What is a merger
A merger is a corporate strategy in which two or more companies combine to form a new entity. This can occur through various means, such as a purchase of assets, a stock swap, or a combination of both.
Name the three types of mergers
Horizontal merger
Vertical merger
Conglomerate merger
What is a vertical merger
two companies that operate at different stages of the production or distribution process within the same industry combine their operations.
What is the horizontal merger
when two companies that operate in the same industry and produce similar goods or services combine their operations.
What is conglomerate merger
merger involves companies that operate in unrelated industries or sectors coming together. The goal is often to diversify the business and capitalize on new opportunities.
What is an acquisition?
The pictures of one company by another company usually buying its stocks
