Chapter 4 Management
Three primary forms of business ownership
Corporation Sole proprietorship Partnership
S corporation and limited liability companies are similar except that S corporation cannot have more than
75 shareholders and these must be individuals or estates.
A unique government creation that looks like a corporation but is taxed like sole proprietorship and partnerships is:
An S Corporation
The joining of firms in completely unrelated industries is a(n)
Conglomerate Merger
When producers, consumers, or workers with similar needs pool their resources for mutual gain, they start a(n):
Cooprative
This isa legal document that the state issues to a company based on information the company provides in the articles of incorporation
Corporate Charter
These are the profits of a corporation that are distributed in the form of cash payments to stockholders.
Dividends
What are some of the advantages of a corporation?
Ease of transfer of ownership, perpetual life, limited liability
A partnership where all the owners share in operating the business and in assuming unlimited liability for the business's debts is a:
General partnership
The joining of two firms in the same industry is a(n)
Horizontal Merger
Usually listed in the articles of partnership
How profits will be distributed Each partners' management role Assets each partner has contributed
A partnership established for a specific project or for a limited time is called:
Joint venture
When two firms join together to form one new company, it is called a(n)
Merger
An advantage of having one or more partners is that:
More financial resources are available More skills and knowledge are available
This type of corporation focuses on providing a service rather than earning but are not owned by a government entity.
Nonprofit corporation
A legal of business with two more owners is a(n)
Partnership
These are businesses owned and operated by one individual, and are the most common form of business organization in the United States
Sole Proprietoeship
The only legal condition to dissolving a is that all financial obligations must be paid or resolved
Sole Proprietorship
Forms of business ownership from easy to more difficult based on ease of starting a business
Sole proprietorship Partnership Corporation
One of the big differences between corporations and S corporations is how profits are:
Taxed
A limited liability company (LLC) is taxed in the same manner as a partnership.
True
The disadvantage of sole proprietorships is that any debts or losses incurred by the business are your debts because you and the business are legally one and you have:
Unlimited liability
The joining of two companies involved in different but related levels of an industry is called a(n)
Vertical merger
Board members
are legally liable for the mismanagement of the firm or for any misuse of funds.
Quasi-public corporation
are owned and operated by the federal, state, or local government.
The individuals creating a corporation must file legal documents generally referred to as
articles of incorporation with the appropriate state office (often the secretary of state).
A limited partnership
has partners who do not share in operating the business.
A private corporation that needs more money to expand or to take advantage of opportunities may have to obtain financing by "going public" through an
initial public offering, that is, becoming a public corporation by selling stock so that it can be trade in public markets.
A(n) leveraged buyout
is an attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing.
A public corporation
is one whose stock anyone may buy, sell, or trade.
A private corporation
is owned by just one or few people who are closely involved in managing business.
A(n) acquisition
is where one company purchases the property and obligations of another.
A corporation is a
legal entity with authority to act and have liability separate from its owners.
The responsibility for a loss only up to the amount invested is
limited liability
