Business Ownership

Question 1

Private Companies

Answer 1

A private company is a legal entity separate from its owner or owners. The company structure means the owners are not usually personally liable for business debts. Private companies are owned by shareholders, often the company’s managers.

Question 2

Public Companies

Answer 2

Companies that go public are large businesses, and they have many legal and financial reporting obligations. The general public and other institutions can buy shares in public companies. The public company structure is good for major capital injection, allowing the business to expand.

Question 3

Multinationals

Answer 3

For both of growth and flexibility, multinationals have operations in various countries. Multinational can save money by sitting up operations and countries where costs are cheaper. Foreign branches can adapt to the local market and also find new markets.

Question 4

Franchises

Answer 4

In this model, a business (franchisor) authorizes a franchisee to set up a branch under its name, in return for a fee. The franchisor needs less capital than it otherwise would to develop a business. The franchisee takes on a known, successful business model and name, so minimizing risk.

Question 5

Nonprofit sector

Answer 5

Common nonprofit organizations include charities and trade organizations. Their organizational structure is similar to that of a company. They may generate substantial sums of money, but plow it back into beneficial causes rather than distributing profits.

Question 6

Sole Proprietorship or Partership

Answer 6

Is simple to set up and requires little capital. One or more owners conduct business as a legal entity. Owners are personally liable for business debts.

Question 7

Firm

Answer 7

Collective term for individuals in a partnership.

Question 8

Limited liability partnership (LLP)

Answer 8

Partners not personally accountable for business debts.

Question 9

Pros and Cons of Sole Proprietorships

Answer 9

Structures are excellent for anymore starting out or running a small business - as long as the business stays out of debt : owners are personally liable for business debts.

Question 10

Stockholder

Answer 10

Individual, group, organization that own shares in the company

Question 11

Doing business as (DBA)

Answer 11

Operational rather than company name

Question 12

Professional Corporation (PC)

Answer 12

Corporate form used primarily for doctors, lawyers, and similar professional service providers.

Question 13

Limited Liability Corporation (LLC)

Answer 13

A limited liability company is a hybrid between a corporation in a partnership. The upside of an LLC is that it offers many of the advantages of a corporation, but it’s cheaper to create and maintain. Taxation rules very, depending on Articles of Organization of the LLC. Laws offer different from state to state.