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