Chapter 5: Business Ownership Flashcards Preview

Introduction to Business > Chapter 5: Business Ownership > Flashcards

Flashcards in Chapter 5: Business Ownership Deck (25):
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Sole proprietorship

A business that is owned, and usually managed, by one person

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Partnership

A legal form of business with two or more owners

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Corporation

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

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Unlimited liability

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

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General partnership

All owners share in operating the business and assuming liability for the business debts

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Limited partnership

One or more general partners and one or more limited partners

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General partner

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

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Limited partner

Owner who invests money in the business but doesn't have any management responsibility or liability for losses beyond the investment

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Limited liability

The responsibility of a business's owners for losses only up to the amount they invest

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Master limited partnership

A partnership that looks much like a corporation but is taxed like a partnership and avoids the corporate income tax

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Limited liability partnership

A partnership that limits partners's risk of losing their personal assets to only their own acts and omissions of people under their supervision

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Conventional corporation

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

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S Corporation

A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships

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Limited liability company

A company similar to an S Corporation but without the special eligibility requirements

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Merger

The result of two firms forming one company

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Acquisition

One company's purchase of the property and obligations of another company

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Vertical Merger

The joining of two companies involved in different stages of related businesses.

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Horizontal merger

The joining of two firms in the same industry

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Conglomerate merger

The joining of firms in completely unrelated industries

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Leveraged buyout

An attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing

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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

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Franchisor

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

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Franchise

The rights to use a specific business's name and sell its products or services in a given territory

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Franchisee

A person who buys a franchise

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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