Chapter 6 Corporate Forms of Business Ownership

Joint Venture

An agreement among two or more companies to work together.

Personal Guarantee

An agreement which makes someone personally liable for the debts of a corporation.

Charter

An official document through which a state grants the power to operate as a corporation.

Non Profit Corporation

An organization that does not exist to make profits and is not taxed.

Officers

Executives hired to manage a business.

LLC or Sub Chapter S

Limited Liability Corporation - A special type of corporation which is taxed like a partnership.

Limited Liability

Limits the potential loss of shareholders to only the value of their stock.

Stockholder

Owners of a corporation.

Dividends

Profits that are distributed to stockholders.

Proxy

A written authorization for someone to vote on behalf of a stockholder.

Prospectus

A summary of the features of the business and it's stock offering.

Cooperative

A business owned and operated by its members for the purpose of supplying themselves with goods and services.

Corporation

A business owned by a group of people and authorized by the state in which it is located to act as a person, separate from its owners.

Quasi Public Corporation

A business that provides an important service to a society but lacks the profit potential to attract investors.

Open Corporation

A company who offers it's shares of stock for sale to the public.

Close Corporation

A corporation held by a small group of owners whose stock is not publicly traded.

Virtual Corporation

A network of companies that form an alliance to take advantage of market conditions.

Activist Shareholder

A shareholder in a company who uses equity stake to put pressure on management to make changes to the company.

Stock

Shares of ownership of a company.

IPO

The first sale of stock by a company to the public.

Board of Directors

The ruling body of a corporation.