Chapter 5
Help!
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| Owned and managed by one person | Sole proprietorship
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| Two or more people legally agree to co-own a business | partnership
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| A legal entity with authority to act and have liability apart from its owners | corporation
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| Ease to start and end a business ability to become your own boss pride of ownership tax advantages retention of company profit | advantages of sole proprietorships
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| the responsibility of owners for all of the debts of the business- the risk | unlimited liability
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| unlimited liability limited financial resources overwhelming time commitment limited growth limited life span | disadvantages of sole proprietorships
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| A partnership in which all owners share in operating the business and in assuming liability for business's debts | general partnership
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| a partnership with one or more general partners and one or more limited partners | limited partnership
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| an owner who has unlimited liability and is active in managing the firm | general partner
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| an owner who invests money in the business but does not have any management responsibility or liability for losses beyond their investment | limited partner
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| the responsibility of a business's owners for losses only up to the amount they invest; limited partners and shareholders | limited liability
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| a partnership that looks like a corporation but is taxed like a partnership | master limited partnership MLP
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| 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 | Limited liability partnership LLP
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| more financial resources shared management more skills and knowledge longer survival tax advantages | advantages of a partnership
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| unlimited liability division of profits disagreements among partners difficulty of termination | disadvantages of a partnership
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| a star charged legal entity with authority to act and have liability separate from its owners | Conventional (C) corporation
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| A unique government creation that looks like a corporation but is taxed like a sole proprietorship or partnership, must meet qualifications | S corporation
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| must have under 100 shareholders must be citizens or residents of the US must have one class of stock no more than 25% of income from passive sources | qualifications of S corporations
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| similar to S corporations but without requirements | limited liability companies (LLC)
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| Limited Liability ability to raise money perpetual life ease of ownership change separation of ownership from management | advantages of corporations
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| initial cost double taxations two tax returns size may become to large to manage difficulty terminating | disadvantages of corporations
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| The result of two firms joining to form one company | merger
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| the joining of two companies involved in different stages of related businesses | vertical merger
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| the joining of two firms in the same industry | horizontal merger
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| the joining of firms in completely unrelated industries | conglomerate merger
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| one company purchases the property and obligations of another company | acquisitions
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| an attempt by employees, management, or a group of investors to buy out the stockholders in a company by borrowing the necessary funds | leveraged buyout (LBO)
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| an arrangement whereby someone with a good idea for a business sells the rights to use the business's name and sell a product or service to others in a given industry | franchise agreement
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| One who sells their idea/product/service | franchisor
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| selling the name or product or service | franchise
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| One who buys an idea /product/service | franchisee
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| management and marketing assistance personal ownership nationally recognized name financial advice and assistance lower failure rates | advantages of a franchise
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| large start up costs shared profit management regulation coattail effects restrictions on selling fraudulent franchisors | disadvantages of franchises
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| 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 | cooperatives
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Review the information in the table. When you are ready to quiz yourself you can hide individual columns or the entire table. Then you can click on the empty cells to reveal the answer. Try to recall what will be displayed before clicking the empty cell.
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Or sort by any of the columns using the down arrow next to any column heading.
If you know all the data on any row, you can temporarily remove it by tapping the trash can to the right of the row.
To hide a column, click on the column name.
To hide the entire table, click on the "Hide All" button.
You may also shuffle the rows of the table by clicking on the "Shuffle" button.
Or sort by any of the columns using the down arrow next to any column heading.
If you know all the data on any row, you can temporarily remove it by tapping the trash can to the right of the row.
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