Business Quiz #3

Private Corporation

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

Board of Directors

A group of individuals, elected by the stockholders to oversee the general operation of the corporation, who set the corporation's long-range objectives.

General Partner

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

Business Plan

A precise statement of the rationale for a business and a step-by-step explanation of how it will achieve its goals.

Small Business Administration

An independent agency of the federal government that offers managerial and financial assistance to small businesses.

Disadvantages of small business ownership?

High stress level, high failure rate, undercapitalization, managerial inexperience, and inability to cope with growth

Advantages of small business ownership?

Independence, costs, flexibility, focus, and reputation

Undercapitalization

The lack of funds to operate a business normally.

Horizontal Merger

When a firms that make and sell similar products to the same customer merge. Straight across.

Vertical Merger

When companies operating at a different but related levels of an industry merge. Up and Down. Potato farm sold to McDonald's.