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  1. Define: sole proprietorship
    a business that is owned, and usually managed, by one person (p. 114)
  2. Define: partnership
    a legal form of business with two or more owners (p. 114)
  3. Define: corporation
    a legal entity with authority to act and have liability apart from its owners (p. 115)
  4. Define: unlimited liability
    the responsibility of business owners for all of the debts of the business (p. 116)
  5. Define: general partnership
    a partnership in which all owners share in operating the business and in assuming liability for the business's debts (p. 117)
  6. Define: limited partnership
    a partnership with one or more general partners and one or more limited partners (p. 117)
  7. Define: general partner
    an owner (partner) who has unlimited liability and is active in managing the firm (p. 117)
  8. Define: limited partner
    An owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment (p. 117)
  9. Define: limited liability
    the responsibility of a business' owners for losses only up to the amount they invest; limited partners and shareholders have limited lisbility (p. 117)
  10. Define: master limited partnership (MLP)
    a partnership that looks much like a corporation (in that it acts like a corporation and is traded on a stock exchange) but is taxed like a partnership and thus avoids the corporate income tax (p. 117)
  11. Define: limited liability partnership (LLP)
    a partnership that limits partners, risk of losing their personal assets to only their own acts and omissions of people under their supervision (p. 118)
  12. Define: conventional (C) corporation
    a state-chartered legal entity with authority to act and have liability separate from its owners (p. 121)
  13. Define: S corporation
    a unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships (p. 125)
  14. Define: limited liability company (LLC)
    a company similar to an S corporation but without the special eligibility requirements (p. 126)
  15. Define: merger
    the result if two firms forming one company (p. 129)
  16. Define: acquisition
    one company's purchase of the property and obligations of another company (p. 129)
  17. Define: vertical merger
    the joining of two companies involved in different stages of related businesses (p. 129)
  18. Define: horizontal merger
    the joining of two firms in the same industry (p. 129)
  19. Define: conglomerate merger
    the joining of firms in completely unrelated industries (p. 129)
  20. Define: leveraged buyout (LBO)
    an attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing (p. 130)
  21. Define: franchise agreement
    an arrangement whereby someone with a good idea for business sells the rights to use the business name and sell a product or service to others in a given territory (p. 131)
  22. Define: franchisor
    a company that develops a product concept and sells others the right to make and sell the products (p. 131)
  23. Define: franchise
    the right to use a specific business' name and sell its products or services in a given territory (p. 131)
  24. Define: franchisee
    a person who buys a franchise (p. 131)
  25. Define: cooperative
    a business owned and controlled by the people who use it--producers, consumers, or worker with similar needs who pool their resources for mutual gain (p. 137)
Card Set:
2012-04-04 19:08:18

key terms from chapter five - Nickels, W.G., 2010. Understanding Business. McGraw-Hill Companies, Inc: New York. ed9, p. 112-143.
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