Chapters 5, 7-8, 10 Flashcards
(23 cards)
What are the three major forms of business ownership?
- 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.
Define unlimited liability;
The responsibility of business owners for all of the debts of the business.
What is general partnership?
A business owned by two or more people where everyone helps run it and is responsible for the business’s debts.
What is general partnership?
A business owned by two or more people where everyone helps run it and is responsible for the business’s debts.
What is limited partnership?
A business with both general partners (who run it and take on the risk) and limited partners (who just invest money and dont run it or take much risk).
What is general partners?
A person who helps run the business and is fully. Responsible if the business has debts or gets sued.
What is limited partners?
An owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment.
What is limited liability?
If the business loses money or gets sued, the owners only risk losing the money they put into the business.
What is master limited partnership (MLP)?
A partnership that looks much like a corporation but is taxed like a partnership.
What is limited liability partnership (LLP)?
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.
Define Conventional (C) Corporation; `
A business that is seen by the law as its own person. It can make money, owe debts, or get sued — but the people who own it (the stockholders) aren’t personally responsible for its problems.
Define S Corporations:
A special type of business that acts like a regular corporation but doesn’t pay corporate taxes. Instead, the profits and losses go straight to the owners’ personal tax returns — like in a sole proprietorship or partnership.
Define Limited Liability Company (LLC):
A business that protects the owners from being personally responsible for debts (like a corporation) but is easier to set up and run, with fewer rules than an S Corporation.
Define merger
The result of two firms forming one company.
Define acquisition;
One companies purchase of the property and obligations of an other company.
What are the three different types of mergers?
- Verticals Merger: the joining of two companies involved in different stages of related business.
- Horizontal Merger: the joining of two firms in the same firm.
- Conglomerate Merger: the joining of firms in completely unrelated industries.
Define Leverage Buyout (LBO);
An attempt by employees, management, or a group of investors to purchase and organization primarily through borrowing.
Define franchise agreement;
An agreement 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.
Define franchisor;
A company that develops a product concept and sells others the rights to make and sell the products.
Define franchise;
The right to use a specific business’s name and sell its products or services in a given territory.
Define franchisee;
A person who buys a franchise.
Define cooperative (co-op);
A business owned and controlled by the people who use it - producers, consumers, or workers with a similar needs who pool their resources for mutual gain.
What are the four functions of management?
- Planning
- Organizing
- Leading
- Controlling
