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31 Cards in this Set
- Front
- Back
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sole propreitorship |
single owner who manages the company |
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partnership |
voluntary agreement between twoor more co-owners |
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general partnership |
all partners can take active role in managing the businessand have unlimited libaility for claims |
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corporation |
business is ocnsidered a legal entity, distinct from it's owners |
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articles of incorporation |
establishes the existence of a enw corporation |
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limited libaility |
owners are not personally libale for claims against theirr firms |
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limited libaility company |
offers limited liability to owners and flexible tax treament |
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sole proprietorship advtanges |
• Ease of formation• Retention of control• Pride of ownership• Retention of profits• Possible tax advantage |
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sole proprietorship disadvtanges |
• Limited financialresources• Unlimited liability• Limited liability to attractand maintain talentedemployees• Heavy workload andresponsibilities• Lack of permanence |
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Pros of Partnership |
• Ability to pool financialresources• Ability to shareresponsibilities andcapitalize oncomplementary skills• Ease of formation• Possible tax advantage |
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cons of partnership |
• Unlimited liability• Potential fordisagreements• Lack of continuity• Difficulty inwithdrawing from apartnership |
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Limited Partnership |
includes at least onegeneral partner who actively manages thecompany and accepts unlimited liability• Other partner gives up the right to activelymanage the company in exchange of limitedliability |
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Limited LiabilityPartnership (LLP) |
All partners have the right toparticipate in the management and havelimited liability for company debts |
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C Corporation |
Offers limited liability to all its owners, whoare called stockholders• Requires filing articles of incorporation, payingfiling fees, and adoption of corporate bylaws |
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instistutional investors |
: Organization that poolscontributions from investors, clients, ordepositors and uses these funds to buy stocksand securities |
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board of directors |
: Elected by stockholdersto represent their interests |
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advantages of c corporation |
• Limited liability• Permanence• Ease of transfer ofownership• Ability to raise financialcapital• Ability to make use ofspecialized management |
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disadvantages of c corporation |
Expense and complexity offormation and operation• Complications whenoperating in multiple states• Double taxation of earningand additional taxes• More paperwork andregulation and less secrecy• Possible conflicts of interest |
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advantage of franchise |
• Less risk• Training and support• Brand recognition• Easier access to funding |
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Disadvantages of franchise |
• Costs• Lack of control• Negative halo effect• Growth challenges• Restrictions on sale• Poor execution |
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entrepreneurial mindset |
Attitude to change the world through goods orservices |
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characteristics of entrepreneur |
Vision and self‐reliance• Energy and confidence• Tolerance of uncertainty and failure |
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funding options for small businesses |
Personal resources• Loans•
Alternative lenders: Private firms that:• Charge high interest rates• Collect payments on daily or weekly basis toreduce risks• Overlook lower credit scores |
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Angel investors |
Individuals who invest instart‐up companies with high growthpotential in exchange for a share ofownership |
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Venture capital firms |
Invest in start‐upbusinesses with high growth potential inexchange for a share of ownership |
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Small Business Administration (SBA) |
Agency of the federal government designedto maintain and strengthen the nation’seconomy by:• Aiding• Counseling• Assisting• Protecting the interests of small businesses |
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Internet2 |
High‐tech Internet with access limited to a consortium ofmember organizations |
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Intranet |
Private network navigated using a web browser, which limits accessto a single member |
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Extranet |
• Intranet that allows limited access to a selected group ofstakeholders |
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Cybermediary: |
: Internet‐based firm thatspecializes in the secure electronic transfer offunds |
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• Electronic bill presentment and payment: |
Makes it easy for the customer to make apayment by clicking on the payment optioncontained in an email |
