Ch 3 Types of Business Ownership
conglomerate merger
a merger of firms in unrelated indutries is called a
franchisee
a person who buys a franchise
franchise agreement
When someone with a good idea for a business sells the rights to use the buisness name and sell a product or service to others in a given territory.
merger
two or more firms combining to form one company
legacy
what a person leaves behind when he or she dies
initial cost
The expected cash payment to form a corporation.
board of directors
A group of people elected by the stockholders of a corporation to set the policies for the corporation.
limited liability
An advantage of a corporation is the owners are liable only up to the amount of their individual investments. This is called __ ___.
Vertical merger
If Anheuser-Busch were to acquire a bottling/canning firm it would be and example of a
horizontal merger
If Chrysler and Ford were to merge it would be an example of a
self-employment tax
It is the total social security and medicare tax paid by people who work for themselves.
perpetual life
One major advantage of corporations, which means the corporation can continue indefinitely with new owners.
double taxation
Situation in which taxes may be payable both by a corporation on its profits and by shareholders on dividend incomes
limited
resources such as money, time, people, and equipment are less with a sole proprietorship and therefore considered
Unlimited liability
The owner is personally and fully responsible for all losses and debts of the business
Partnership
a business organization owned by two or more persons who agree on a specific division of responsibilities and profits
Sole Proprietorship
a business owned and managed by a single individual
Corporation
a business owned by stockholders who share in its profits but are not personally responsible for its debts
Limited Liability Company
a company similiar to an S-Corporation but without the special eligibility requirements.
franchisor
a company that develops a product concept and sells others the rights to make and sell the product.
profit
a sole proprietor gets to keep all of this after expenses are paid
fringe benefits
a sole proprietorship has few of these--, Any financial extras beyond the regular pay check, such as health insurance, life insurance, paid vacation and/or retirement
S-Corporation
a unique government creation that looks like a coporation but is taxed like sole proprietorships and partnerships
resources
all things used in producing goods and services or ___ are greater in a partnership than in a sole proprietorship
pride
an advantage of owning your own business is that you have this feeling of self-respect and personal worth
stockholders
owners of a corporation who may share in the profits
disagreements
partners may have differences of opinion or points of argument and these can be called ___
terminate
partnerships are more difficult to end or __ than sole proprietorships
life span
the amount of time until a buisness ends or ___ ____ is limited in a sole proprietorship