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30 Cards in this Set
- Front
- Back
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Businesses owned and operated by one individual; the most common form of business organization in the United States
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Sole proprietorships
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Advantages of sole proprietorship
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-Ease and cost of formation
-Secrecy -Distribution and use of profits -Flexibility and control of the business -Government regulation -Taxation -Closing the business |
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Disadvantages of sole proprietorship
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-Unlimited liability
-Limited sources of funds -Limited skills -Lack of continuity -Lack of qualifed employees -Taxation |
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A form of business organization defined by the Uniform Partnership Act as "an association of two or more persons who carry on as co-owners of a business for profit"
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Partnership
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A partnership that involves a complete sharing in both the management and the liability of the business
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General partnership
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A business organization that has at least one general partner, who assumes unlimited liability, and at lease one limited partner, whose liability is limited to his or her investment in the business
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Limited partnership
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Legal documents that set forth the basic agreement between partners
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Articles of partnership
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Advantages of partnerships
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-Ease of organization
-Availability of capital and credit -Combined knowledge and skills -Decision making -Regulatory controls |
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Disadvantages of partnerships
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-Unlimited liability
-Business responsibility -Life of the partnership -Distribution of profits -Limited sources of funds |
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A legal entity, created by the state, whose assets and liabilities are separate from its owners
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Corporation
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Shares of a corporation that may be bought or sold
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Stock
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Profits of a corporation that are distributed in the form of cash payments to stockholders
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Dividends
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A legal document that the state issues to a company based on information the company provides in the articles of incorporation
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Corporate charter
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A corporation owned by just one person or a few people who are closely involved in managing the business
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Private corporation
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A corporation whose stock anyone may but, sell, or trade
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Public corporation
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Selling a corporation's stock on public markets for the first time
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Initial public offer (IPO)
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Corporations owned and operated by the federal, state, or local government
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Quasi-public corporation
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Corporations that focus on providing a service rather than earning a profit but are not owned by a government entity
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Nonprofit corporations
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A group of individuals, elected by the stockholders to oversee the general operation of the corporation, who set the corporation's long-range objectives
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Board of directors
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A special type of stock whose owners, though not generally having a say in running the company, have a claim to profits before other stockholders do
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Preferred stock
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Stock whose owners have voting rights in the corporation yet do not receive preferential treatment regarding dividends
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Common stock
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Advantages of corporations
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-Limited liability
-Ease of transfer of ownership -Perpetual life -External sources of funds -Expansion potential |
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Disadvantages of corporations
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-Double taxation
-Forming a corporation -Disclosure of information -Employee-owner separation |
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A partnership established for a specific project or for a limited time
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Joint Venture
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A corporation taxed as though it were a partnership with restrictions on shareholders
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S Corporation
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Form of ownership that provides limited liability and taxation like a partnership but places fewer restrictions on members.
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Limited liability company (LLC)
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An organization composed of individuals or small businesses that have banded together to reap the benefits of belonging to a larger organization
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Cooperative or co-op
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The combination of two companies (usually corporations) to form a new company
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Merger
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The purchase of one company by another, usually by buying its stock
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Acquisition
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A purchase in which a group of investors borrows money from banks and other institutions to acquire a company (or a division of one), using the assets of the purchased company to guarantee repayment of the loan
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Leveraged buyout (LBO)
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