Chapter 6: Starting Business Flashcards
(14 cards)
sole proprietorship
form of business ownership with a single owner who usually actively manage the company (unlimited liability)
partnership
two or more people act as co-owners (unlimited liability)
corporation
form of business ownership in which the business is considered a legal entity that is seperate from its owner (limited liability)
Limited Liability Company (LLC)
business ownership that offers both limited liability to its owners as well as flexible tax treatment
C Corporation
legal business entity that offers limited liability to all of its owners
Corporate bylaws
basic rules of governing how a corporation is organized and how it conducts its business (requirements vary by state)
S Corporation
form of corporation that avoids double taxation by having its income taxed as if it were a partnership
Statutory (or closed) Corporation
limited number of owners that operated under simpler, less formal rules than a C Corporation
Nonprofit
corporation that does not seek to earn a profit and differs in several fundamental respects from C Corporations
Franchising
licensing agreement in which a franchisor allows franchisees to use its name, trademark, products, business methods, and other property in exchange for monetary payments and other considerations
franchisor
business entity in a franchise relationship that allows others to operate its business using resources it supplies in exchange for money
franchisee
party in franchise relationship that pays for the right to use resources supplied by the franchisor
distribtorship
type of franchising arrangement in which the franchisor makes a product and licenses the franchisees to sell it
franchise agreement
the contractual arrangement between a franchisor and franchisee that spells out the duties and responsibilities of both parties
