Chapter 4

limited partnership

a business organization that has at least one general partner, who assumes unlimited liability, and at least one limited partner, whose liability is limited to his or her investment in the business

private corporation

a corporation owned by just one or a few people who are closely involved in managing the business

public corporation

a corporation whose stock anyone may buy, sell, or trade

Partnership

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"

Board of Dirctors

a groups of individuals, elected by stockholders to oversee the general operation of the corporation, who set the corporations long-range objectives.

corporate charter

a legal document that the state issues to a company based on information the company provides in the articles of incorporation

Corporation

a legal entity, created by the state, whose assets and liabilities are separate from it's owners,

General Parternship

a partnership that involves a complete sharing in both the management and liability of the business

leverged buyout

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.

preferred stock

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.

Sole Proprietorship

businesses owned and operated by one individual; the most common form of B.O. in the US

S corporation

corporation taxed as though it were a partnership with restrictions on shareholders

Limited Liability Company (LLC)

form of ownership that provides limited liability and taxation like a partnership but places fewer restrictions on members

articles of partnership

legal documents that set forth the basic agreement between partners

Dividends

profits of a corporation that are distributed in the form of cash payments to stockholders

Initial Public Offering (IPO)

selling a corporation's stock on public markets for the first time

Stock

shares of a corporation that may be bought or sold

common stock

stock whose owners have voting rights in the corporation, yet do not receive preferential treatment regarding dividends

merger

the combination of two companies (usually corporations) to form a new company

acquisition

the purchase of one company by another, usually by buying its stock.