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Flashcards in Business Types Deck (17)
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1

A person who attempt to earn money and make profits by taking the risk of owning and operating a business.

entrepreneur

2

a business owned and operated by one person, most uncommon form of business. unlimited liability

sole proprietorship

3

what are the advantages of a proprietorship?

Owner is boss
Owner receives all profits
Owner personally knows employees and customers
Owner can act quickly in decision making

4

what are the disadvantages of a propritorship?

Owner may lack special skills and abilities
Owner may lack funds
Owner bears all losses
Illness or death may close the business

5

A business owned by two or more persons, General Partnerships, Unlimited liability, Limited Partnerships

Partnership

6

advantages of a partnership?

Skills and abilities pooled
Sources of capital increased
Credit position improved
Shared responsibilities
Decreased risk

7

disadvantages of a partnership?

Unlimited financial liability for all debts of the business
Disagreement among partners
Actions are legally binding
Business is dissolved if one partner dies

8

a business that is chartered by a state and legally operates apart from the owner. the value of this business is divided into equal units called shares of stock

corporation

9

three key people in corporations

stockholders, officers, directors

10

Represented by ownership of shares of stock

stockholders

11

Ruling body of the corporation, Elected by the stockholders, Develop plans and policies to guide the corporation, Most large firms – 10 to 25, Majority are from outside the corporation

directors

12

The top executives who are hired to manage the business, Appointed by the Board of Directors, President, Secretary, Treasurer, CEO, CFO

officers

13

advantages of corporations:

Ease of raising money for expansion
Limited liability of stockholders
Permanency of existence
Ease in transferring ownership – buy or sell stock

14

disadvantages of corporations:

Taxation
Higher taxes on the profits of the corporation and on each stockholder
Government regulations
Complicated accounting and record keeping
Complexity of forming a corporation

15

A written contract granting permission to sell someone else’s product or service in a prescribed manner, over a certain period of time, and in a specified territory.

franchise

16

]advantages of a franchise

Be your own boss
Get a head start
Gain additional training and assistance
Profit from name recognition
Take advantage of national advertising

17

disadvantages: of a franchise

You must play by the rules
Limits choices
Start-up costs