Quiz 2 chapter 5 Flashcards

1
Q

sole proprietorship

A

businesses owned and usually managed by a single individual

SPC

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2
Q

Partnership

A

voluntary agreements where two or more people act as co-owners; there are several types
SPC

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3
Q

corporations

A

legal entities, separate from their owners

SPC

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4
Q

4 sole proprietorships: advantages

A
  • retention of control
  • pride of ownership
  • retention of profits
  • possible tax advantage
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5
Q

5 sole proprietorships: disadvantages

A
  • limited financial resources
  • unlimited liability
  • limited ability to attract and retain talented employees
  • heavy workload and responsibilities
  • lack of permanence
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6
Q

General partnerships: advantages

A
  • pooled financial resources
  • shared responsibilities
  • ease of formation
  • tax advantages
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7
Q

general partnerships: disadvantages

A
  • unlimited liability
  • disagreements
  • difficulty in withdrawing from partnership
  • lack of continuity
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8
Q

general partnership

A

all partners have the right to participate in the management of the firm, and all share unlimited liability

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9
Q

Limited partnership

A

includes at least one general partner and at least one limited partner (who has limited liability)

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10
Q

limited liability partnership

A

all partners are actively involved but they have some form of liability, which varies by jurisdiction

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11
Q

acquisitions

A

when one firm buys another

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12
Q

mergers

A

two companies agree to become one

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13
Q

corporations look for

A

growth opportunities, operational efficiencies, and competitive advantages

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14
Q

divestitures

A

allow a firm to streamline operations and focus

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15
Q

spin off

A

setting up the division or part of the business as a separate entity (sell shares to existing shareholders)

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16
Q

carve out

A

setting up a separate business from an operation (sell shares to outside investors)

17
Q

Franchising

A

not a form of ownership but an operation option; the franchisee uses the brand name, trademark, and practices of the franchisor