Topic 4: Chapter 5 Flashcards
Sole proprietorship
A business that is owned, and usually managed by one person
Partnership
A legal form of business with two or more owners
Corporation
A legal entity with authority to act, and have liability separate from its owners
Unlimited liability
Listed as one disadvantage of a sole proprietorship: The responsibility of business owners for all of the debts of the business.
General partnership
A partnership in which all owners share in operating the business, and in assuming liability for the businesses debts
Limited partnership
A partnership with one or more general partners, and one or more limited partners
General partner
An owner who has unlimited liability, and his active and managing the firm
Limited partner
An owner who invests money in the business, but does not have any management responsibility or liability for losses beyond investment
Limited liability
The responsibility of a business as owners for losses only up to the amount they invest limited partners and shareholders, have limited liability
Master limited partnership
A partnership that looks much like a corporation but is taxed like a partnership and thus avoids the corporate income tax
Limited liability partnership
A partnership that limits partners risk of losing their personal assets to only their own acts and omissions, and to the acts and omissions of people under their supervision
Conventional corporation
A state chartered legal entity with authority to act, and have liability separate from its owners
S corporation
A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships
LLC
Company somewhere to an S corporation but without the special eligibility requirements
Merger
There is only two firms forming one company
Acquisition
One companies purchase of the property and obligations of another company
Vertical merger
The joining of two companies involved in different stages of related businesses
Horizontal merger
The joining of two firms in the same industry
Conglomerate merger
The joining of firms in a completely unrelated industries
Leveraged buyout (LBO)
An attempt by employees management or a group of investors to purchase an organization primarily through borrowing
Franchise agreement
An arrangement whereby 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
Franchisor
A company that develops a product concept and sells, others the rights to make and sell the products
franchise
The right to use a specific business, his name, and sells products or services in a given territory
Franchise
A person who buys a franchise
Cooperative (co-op)
A business owned and controlled by the people who use it producers consumers, or workers with similar needs to pull their resources for mutual gain
