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25 Cards in this Set
- Front
- Back
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 apart from its owners. |
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Unlimited Liability |
The responsibility of business owners for all of the debts of the business. |
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General Partnership |
A partnership in which all owners share in operating the business and in assuming liability for the business's debts. |
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Limited Partnership
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A partnership with one or more general partners and one or more limited partners.
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General Partner |
An owner (partner) who has unlimited liability and is active in managing the firm. |
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Limited Partner |
An owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment. |
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Limited Liability
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The responsibility of a business's owners for losses only up to the amount they invest; limited partners and shareholders (stockholders) have this type of liability.
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Master Limited Partnership (MLP) |
A partnership that looks much like a corporation (in that it acts like a corporation and is traded on a stock exchange) but is taxed like a partnership and thus avoids the corporate income tax. |
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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. |
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Conventional (C) 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 (LLC) |
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 (LBO) |
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 products. |
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Franchise |
The right 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. |