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BA 101 > Midterm 3 > Flashcards

Midterm 3 Flashcards

1
Q

Importing

A

buying products from another country

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2
Q

Exporting

A

selling products to another country

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3
Q

Free trade

A

movement of goods and services among nations without political or economic obstruction

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4
Q

Comparative advantage theory

A

Country should sell to other countries those products that it produces most effectively and efficiently and should buy from other countries that can produce as effectively

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5
Q

Absolute advantage

A

a country is able to produce a specific product more efficiently that other countries

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6
Q

Balance of trade

A

total value of a nations exports compared to its imports means period

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7
Q

Trade surplus

A

exists when the value of a nation imports measured over a particular period

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8
Q

Trade deficit

A

unfavorable balance of trade, it occurs when the value of a count of its exports

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9
Q

Balance of payments

A

difference between money coming into a country from leaving the country for imports plus money flows from other factors such as tourism, expenditures, and foreign inv.

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10
Q

Dumping

A

practice of selling products in a foreign country at lower prices than those charged in the producing country

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11
Q

Licensing

A

a firm allows a foreign company to produce its products in exchange for a fee

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12
Q

Contract manufacturing

A

involves a foreign country’s production of private label goods to which a domestic brand name or trademark

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13
Q

Joint venture

A

partnership in which two of more companies join to undertake a major project

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14
Q

Strategic alliance

A

long term partnership between two or more companies est. to help each company build competitive market advantages

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15
Q

Foreign direct investment

A

buying permanent property and business in foreign nations

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16
Q

Foreign subsidiary

A

company owned in a foreign country by another company

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17
Q

Multinational corporation

A

organization that manufactures and markets products in many different countries and has multinational stock ownership and multinational management

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18
Q

Exchange rate

A

value of one nations currency relative to the currencies of other countries

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19
Q

Devaluation

A

lowering the value of a nation’s currency relative to other currencies

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20
Q

Counter-trading

A

complex form of bartering in which several nations may be involved, each trading goods and services

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21
Q

Trade protectionism

A

use of government regulations to limit the import of goods and services

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22
Q

Tariff

A

tax on imports making imported goods more expensive

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23
Q

Import quota

A

limit on the number of products in certain categories that a nation can import

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24
Q

Embargo

A

complete ban on the import or export of a certain product or stopping all trade with that particular country

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25
Q

General agreement on tariffs and trade (GATT)

A

1948 agreement that est. mutual reductions in trade restrictions

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26
Q

World trade organization (WTO)

A

international org. that replaced the general agreement on trade and tariffs and was assigned the duty of mediating trade disputes.

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27
Q

Common market

A

regional group of countries that have a common external tariff, no internal tariffs and the coordination of laws among member countries

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28
Q

North american free trade agreement (NAFTA)

A

agreement that created free trade area among the US, Canada and Mexico

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29
Q

Entrepreneurship

A

accepting the risk of starting and running a business

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30
Q

Entrepreneural team

A

group of experienced people from different areas of business who join together to form a managerial team with the skills to develop, make and market a new prod.

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31
Q

Intrapreneurs

A

creative people who work as entrepreneurs within corporations

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32
Q

Micropreneurs

A

entrepreneurs willing to accept the risk of starting and managing the type of business that remains small

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33
Q

Entreprise zones

A

specific geographic areas to which governments try to attract private business investment by offering lower Gv and other gov. support

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34
Q

Incubators

A

centers that offer lowcost offices with basic business services

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35
Q

Small business

A

independently owned and operated, not dominate in its field of operation and meets certain standards of size

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36
Q

Business plan

A

detailed written statement that describes the nature of the business, target market, advantages the business will have in relation to competition and resources and qualifications of the owners

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37
Q

Venture capitalists

A

ind. or companies that invest in new businesses in exchange for partial ownership of those businesses.

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38
Q

Small business investment company program

A

program through which private investment companies licensed by the small business adm lend money to small businesses.

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39
Q

Market

A

consists of people with unsatisfied wants and needs who have both the resources and the willingness to buy

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40
Q

Service corps of retired executives

A

SBA office with volunteers from industry, trade associations, and education who counsel small businesses at no cost

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41
Q

Judiciary

A

branch of the government chosen to oversee the legal system through the court system

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42
Q

Business law

A

rules, statues, codes, and regulations that are est. to provide a legal framework within which business may be conducted and that are enforceable by court action

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43
Q

Statutory law

A

state and federal const. legislative enactments, treaties of the federal gov and ordinances, written law

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44
Q

Common law

A

body of the law that comes from decision handed down by judges, unwritten law

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45
Q

Precedent

A

involves decisions judges have made in earlier cases that guide the handling of new cases

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46
Q

Tort

A

wrongful act that causes injury to another person’s body, property, or reputation

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47
Q

Intentional tort

A

willful act purposely inflicted that results in injury

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48
Q

Negligence

A

behavior that causes unintentional harm or injury

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49
Q

Product liability

A

part of tort law that holds businesses liable for harm that results from production, design, sale, or use of products it markets

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50
Q

Strict product liability

A

legal responsibility for harm or injury caused by product regardless of fault

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51
Q

Patent

A

document that gives inventors exclusive rights to their inventions for 20 yrs

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52
Q

Copyright

A

document that protects a creator’s rights to materials such as books, articles, photos, and cartoons

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53
Q

Uniform commercial code

A

commercial law adopted by every state that covers sales laws and other commercial laws

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54
Q

Express warranties

A

special representations by the seller that buyers rely on regarding the goods they purchase

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55
Q

Implied warranties

A

guarantees legally imposed on the seller

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56
Q

negotiable instruments

A

forms of commercial paper that are transferable among businesses and ind. and represent a promise to pay a specific amount

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57
Q

Contract

A

legally enforceable agreement

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58
Q

Contract law

A

set of laws that specify what constitutes a legally enforceable agreement

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59
Q

Consideration

A

something of value, it is one of the requirements of a legal contract

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60
Q

Breach of contract

A

one party fails to follow the terms of the contract

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61
Q

Payment of damages

A

monetary settlement awarded to a person who is injured by a breach of contract

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62
Q

Consumerism

A

seeks to increase and strengthen the rights and powers of buyers in relation to sellers

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63
Q

Taxes

A

how gov. raises money

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64
Q

Bankruptcy

A

person, business, or gov. entity is unable to meet finical obligations is relieved of those by court that divides any assets among creditors, allowing them to get part of their money

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65
Q

Voluntary bankruptcy

A

legal procedures initiated by a debtor

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66
Q

Involuntary bankruptcy

A

procedures filed by a debtor’s creditors

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67
Q

Deregulation

A

gov. withdrawal of certain laws and regulations that seem to hinder competition

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68
Q

Court system

A

US is org. at the federal, state and local levels

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69
Q

Trial courts

A

hear cases involving criminal and civil law

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70
Q

Criminal law

A

defines crimes, est. punishment and regulates prosecution

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71
Q

Civil law

A

involves legal proceedings that do not involve criminal acts

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72
Q

Appellate courts

A

hear appeals of trial court decisions

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73
Q

Strict liability

A

caused serious problems for manufactures of some products

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74
Q

Tort reform

A

businesses and insurance companies have called for this from huge losses in strict product liability suits

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75
Q

Legally protecting ideas

A

patents, copyrights and trademarks

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76
Q

Penalties

A

violating a patent can be severe

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77
Q

Submarine patent

A

intentionally delaying a patent application and waiting for others to develop the technology

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78
Q

Library of congress

A

copyrights are filled there

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79
Q

Exclusive copyright

A

the holder of that may charge a fee to anyone who wishes to use the material

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80
Q

Article 2 of UCC

A

warranties

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81
Q

Article 3 of UCC

A

negotiable instruments

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82
Q

Full warranty

A

seller to replace or repair a product at no charge if the product is defective

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83
Q

Limited warranties

A

limit the defects or mechanical problems that are covered

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84
Q

Negotiable inst. requirements

A

written and signed by the maker, payable on demand, payable to the bearer and unconditional promise

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85
Q

Endorsement

A

checks or other forms of negotiable inst. are transferred when the payee signs the back of a check

86
Q

Legally binding

A

offer is made, voluntary acceptance, consideration, competent, legal and proper form

87
Q

Consequences of breached contract

A

specific performance, payment of damages and discharge of obligation

88
Q

Payment of damages

A

person violating contract may be required to live up to the agreement if no monetary award is adequate

89
Q

Discharge of obligation

A

agreeing to drop the matter

90
Q

Contract should

A

writing, specify mutual consideration, clearly offered and accepted

91
Q

Exclusive dealing

A

selling goods with the condition that the buyer will not buy goods from a competitor

92
Q

Tying contract

A

buyer to purchase unwanted items in order to purchase desired items

93
Q

Interlocking directorate

A

board of directors includes members of the board of competing corporations

94
Q

Wheeler lea amendment

A

gave the FTC additional jurisdiction over false or misleading advertising

95
Q

Microsoft’s competitive practices

A

have been criticized as being unfair competition, hindering competition in its dealings with computer manufactures

96
Q

Gov use taxes to

A

fund gov operations, discourage citizens from doing harmful things and encourage businesses to hire new employees by offering a tax credit

97
Q

Bankruptcy amendments of 1984

A

allow a person who is bankrupt to keep part of the equity in a house

98
Q

2005 bankruptcy legislation

A

makes it more difficult for people to escape debt from credit cards, medical bills, student loans or other unsecured loans

99
Q

Importance of international markets

A

many customers, US buys a ton from China and companies like UPS or Starbucks operate overseas

100
Q

Third largest exporting nation

A

US

101
Q

Competition is intense

A

the US must compete against aggressive global competitors

102
Q

Why trade with other nations

A

no nation can produce all the products someone needs, meet new people

103
Q

Mutually beneficial exchange

A

some nations have abundant natural resources and lack technological know how, others have sophisticated tech. but not a lot of resources, enable countries to produce what they can and buy the rest in a mutually beneficial exchange

104
Q

small businesses

A

are the real potential in a global market, and generate about 30% of exports but only 1% of them take part

105
Q

Exporting creates

A

great opportunities and boost the US economy

106
Q

Favorable balance of payments

A

more money is flowing out of the country

107
Q

Unfavorable balance of payments

A

more money is leaving than coming into the country

108
Q

Since 1975 the US has run a

A

trade deficit

109
Q

The US exports

A

a lower percentage of its products than other countries do

110
Q

Advantages of licensing

A

company can gain additional revenues from a product, firm can sell start up supplies, materials and consulting services, spends little to no money to produce the product

111
Q

Problems of licensing

A

firm must grant licensing rights to its product for an extended period, if a product has growth in foreign market the bulk of the revenue goes to licensee and if they learn the tech it may break the agreement and produce less

112
Q

Export assistance centers

A

provide hands on exporting assistance and trade finance support for small and medium sized businesses

113
Q

Export trading companies

A

match buyers and sellers from different countries

114
Q

Franchising

A

contractual arrangement where someone with a idea for a business sells the rights to use its name

115
Q

The use of contract manufacturing can cause a company to experiment in a new market

A

without heavy start up costs

116
Q

Use contract manufacturing to temporary

A

meet an unexpected increase in orders

117
Q

Benefits of joint venture

A

shared tech. and risk, shared marketing and management expertise and entry into markets where foreign companies are not allowed unless their goods produce local

118
Q

Drawbacks of joint venture

A
  1. partner can learn tech and practices of the other and leave to become a competitor
  2. shared tech. may become absolute
  3. partnership may be too large to be as flexible as needed
119
Q

Legal requirements of both parent and foreign countries

A

must be observed

120
Q

Advantage of foreign subsidiaries

A

company maintains complete control over any tech. or expertise it may possess

121
Q

Shortcoming of foreign subsidiaries

A

firms assets could be expropriated, taken by foreign gov if the host country fails

122
Q

Sovereign wealth funds

A

fastest growing forms of foreign direct investment , investment funds controlled by gov. holding large stakes in foreign companies

123
Q

Ethnocentricity

A

attitude that our culture is superior to all others

124
Q

Religion

A

have an impact on business operations (misunderstandings about someone culture)

125
Q

Social-cultural differences

A

impact business decisions involving human resource management

126
Q

High value of dollar

A

products of foreign producers would be cheaper but US produced goods would be expensive

127
Q

Low value of dollar

A

foreign goods become more expensive because it takes more dollars to buy them

128
Q

Floating exchange rate

A

currencies float according to supply and demand in global market for currency

129
Q

Bartering

A

trading merchandise for merchandise with no money involved

130
Q

Global markets are governed by a myriad of

A

laws and regulations that are often inconsistent

131
Q

Business people are bound to follow

A

US laws and regulations in conducting business globally

132
Q

Organization for economic cooperation and development and transparency international

A

led the effort to fight corruption and bribery in foreign markets

133
Q

Physical and environmental forces

A
  1. tech constraints may make it difficult to build a large global market
  2. developing nations have primitive trans and storage systems that make distribution ineffective
  3. certain tech. differences affect exportable products
134
Q

Mercantilism

A

selling more goods to other nations than you bought from them, to have a favorable balance of trade

135
Q

Protective tariffs

A

imported taxes designed to raise the price of imported products so that domestic products can be more competitively priced

136
Q

Revenue tariffs

A

raise money for the gov

137
Q

Non-tariff barriers

A

not as specific as tariffs but can still be detrimental to free trade

138
Q

1986 Uruguay round of gatt talks

A

were convened to deal with the renegotiation of trade agreements

139
Q

European union

A

group of 28 nations in western Europe

140
Q

Association of southeast asian nations

A

creates economic cooperation among its five org. members

141
Q

COMESA

A

19 member African trading bloc with a GPD of 658 bill. and pop. of 494 mill.

142
Q

Objections of NAFTA

A

eliminate trade barriers, promote cond of fair competition, increase investment opp. provide effective protection of intellectual property rights

143
Q

Central American free trade agreement

A

free trade zone with central american nations

144
Q

Outsourcing

A

purchase of goods and services from sources outside a firm rather than providing them within the company

145
Q

Offshore outsourcing

A

shifting functions to markets outside the US is more controversial

146
Q

Good accountant

A

decide whether to buy or lease, provide tax planning and financial forecasting, choose sources of financing

147
Q

Small business development centers

A

funded by the gov and ind states help evaluate the feasibility of you idea, develop your plan and complete your funding app.

148
Q

Community development financial inst.

A

source of funding

149
Q

Individual investors

A

primary source of capital for most entrepreneurs

150
Q

Angel investors

A

private ind. who invest their own money in new businesses with potential

151
Q

Functions of a business

A

planning, financing, knowing, managing and keeping records

152
Q

Computer tech.

A

allows home based businesses to look and act as big corporations

153
Q

Entrepreneural attributes

A

self direct, self nurturing, action oriented, highly energetic and tolerant of uncertainty

154
Q

Ethics

A

standards of moral behavior that is accepted by society as right versus wrong

155
Q

Relationship between workers and managers

A

fairness, honesty, openness, and more integrity

156
Q

Compliance based ethics code

A

ethical standards that prevent unlawful behavior by increasing control and penalizing wrongdoers

157
Q

Integrity based ethics code

A

stands that define the org. guiding values, create a good environment

158
Q

Process help improve america’s business ethics

A

top management must support, employees must understand expectations, managers, must be trained, ethics office must be set up, outsiders must be told the program and ethics code must be enforced

159
Q

Corporate social responsibility

A

businesses concern for the welfare of society

160
Q

Corporate philo

A

social resp. that includes charity donations

161
Q

Corporate social initiatives

A

corporate philo directly related to the companies competencies

162
Q

Corporate resp.

A

includes everything from hiring minority workers to making safe products

163
Q

Corporate policy

A

position a firm takes on social and political issues

164
Q

Basic rights of consumers

A

safety, be informed, choose, and be heard

165
Q

Insider trading

A

unethical activity which insiders use private company info to further their own fortunes or those of their friends

166
Q

Social audit

A

systematic evaluation of an org progress toward implementing socially responsible and responsive programs

167
Q

Socially conscious investors

A

companies extend the companys own high standards to all their suppliers

168
Q

Socially conscious research org.

A

analyze and report CSR efforts

169
Q

Environmentalists

A

apply pressuring by naming names of companies that dont abide by their standards

170
Q

Union officials

A

hunt down violations and force companies to comply to avoid negative publicity

171
Q

Customers

A

take their business elsewhere if a company demonstrates irresponsible practices

172
Q

Sole proprietorship

A

business that owned and usually managed by one person

173
Q

Partnership

A

legal form of business with two or more owners

174
Q

Corporation

A

legal entity with authority to act and have liability separate from its owners

175
Q

Unlimited liability

A

responsibility of business owners for all of the debts of the business

176
Q

Limited financial resources

A

limited to the funds that the sole owner can gather

177
Q

Management difficulties

A

many owners are not skilled at management and with details such as accounting

178
Q

Disadvantages of sole proprietorships

A

Unlimited liability, limited financial resources, management difficulties, overwhelming time commitment, few fringe benefits, limited growth and limited life span

179
Q

General partnership

A

all owners share in operating the business and in assuming liability for the businesses debts

180
Q

Limited partnership

A

one or more general partners and one or more limited partners

181
Q

General partner

A

owner who has unlimited liability and is active in managing the firm

182
Q

Limited partner

A

invests money in the business but does not have any management responsibility or liability for losses beyond the investment

183
Q

Limited liability

A

responsibility of a business’s owners for losses only up to the amount they invest, limited partners and shareholders have limited liability

184
Q

Master limited partnership

A

looks like a corporation but is taxed like a partnership and thus avoids the corporate income tax

185
Q

Limited liability partnership

A

limits partners risk of losing their personal assets to only their own acts and omissions and the acts and omissions of the people under their supervision

186
Q

Advantages of partnerships

A

more financial resources, shared management and pooled/complementary knowledge, longer survival and no special taxes

187
Q

Disadvantages of partnerships

A

unlimited liability, division of profits, disagreements among parties, difficulty of termination

188
Q

Conventional corporation

A

state chartered legal entity with authority to act and have liability separate from its owners

189
Q

Advantages of corporations

A

limited liability, ability to raise more money for investment, size, perpetual life, ease of ownership change, ease of drawing talented employees, separation of ownership from management

190
Q

Disadvantages of corporations

A

initial cost, expensive paperwork, double taxation, two tax returns, size, difficulty of termination, possible conflict with stockholders and board of directors

191
Q

Corporation pays tax

A

on income before it can distribute any dividends to stockholders

192
Q

Stockholders pay tax

A

income they receive from the corporation

193
Q

S corporations

A

gov creation that looks like a corporation but is taxed like sole proprietorships and partnerships

194
Q

S corporations must

A

have no more than 100 shareholders, shareholders are ind. or estates and are citizens or permeant residents of the US, one class of stock and have no more than 25% of income from passive sources

195
Q

Limited liability company

A

similar to the s corporation but without the special eligibility requirements

196
Q

Advantages of LLC

A

limited liability, choice of taxation, flexible ownership rules, flexible distribution of profits and losses, operating flexibilty

197
Q

Disadvantages of LLC

A

no stock, limited life span, fewer incentives, taxes and paperwork

198
Q

Merger

A

result of two firms forming one company

199
Q

Acquisition

A

one company’s purchase of the property and obligations of another company

200
Q

Vertical merger

A

joining of two companies involved in different stages of related businesses

201
Q

Horizontal merger

A

joins two firms in the same industry

202
Q

Conglomerate merger

A

joining of firms in completely unrelated industries thereby diversifying business operations

203
Q

Leveraged buyout

A

attempt by employees, management or group of investors to purchase an org primarily through borrowing

204
Q

Franchise agreement

A

someone with a good idea for a business sells the rights to use the business name and sell a product or service to others in a given territory

205
Q

Franchisor

A

company that develops a product concept and sells others the rights to make and sell the product

206
Q

Franchise

A

right to use a specific business’s name and sell its products or services in a given territory

207
Q

Franchisee

A

person who buys a franchise

208
Q

Advantages of franchises

A

management and marketing assistance, personal ownership, nationally recognized name, financial advice and assistance, lower failure rate

209
Q

Disadvantages of franchises

A

large start up costs, shared profit, management regulation, coattail effects, restrictions on selling, fraudulent franchisors

210
Q

Diversity in franchising

A

women in franchising, minority franchise ownership

211
Q

Cooperative

A

business owned and controlled by the people who use it, producers, consumers, or workers with similar needs who pool their resources for mutual gain

BA 101 (3 decks)

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