The flashcards below were created by user Snow on FreezingBlue Flashcards.

  1. What is sole proprietorship?
    A business owned by a single person.
  2. What is unlimited liability?
    It is a legal condition under which any damages or debts incurred by a business are the owner's personal responsibility.
  3. What is partnership?
    An unincorporated company owned by two or more people.
  4. What is general partnership?
    A partnership in which all partners have joint authority to make decisions for the firm and joint liability for the firm's financial obligations.
  5. What is limited partnership?
    A partnership in which one or more persons act as general partners who run the business and have the same unlimited liability as sole proprietors.
  6. What is master limited partnership (MLP)?
    A partnership that is allowed to raise money by selling units of ownership to the general public.
  7. What is limited liability partnership (LLP)?
    A partnership in which each partner has unlimited liability only for his or her own actions and at least some degree of limited liability for the partnership as a whole.
  8. What is a corporation?
    A legal entity, distinct from any individual persons, that has the power to own property and conduct business.
  9. What are shareholders?
    Investors who purchase shares of stock in a corporation.
  10. What is private corporation?
    A corporation in which all the stock is owned by only a few individuals or companies and is not made available for purchase by the public.
  11. What is public corporation?
    A corporation in which stock is sold to anyone who has the means to buy it.
  12. What is liquidity?
    A measure of how easily and quickly an asset such as corporate stock can be converted into cash by selling it.
  13. What is S corporation?
    A type of corporation that combines the capital-raising options and limited liability of a corporation with the federal taxation advantages of a partnership.
  14. What is limited liability company (LLC)?
    A structure that combines limited liability with the pass-through taxation benefits of a partnership; the number of shareholders is not restricted, nor is members' participation in management.
  15. What is a benefit corporation?
    A profit-seeking corporation whose charter specifies a social or environmental goal that the company must pursue in addition to profit.
  16. What is a board of directors?
    A group of professionals elected by shareholders as their representatives, with responsibility for the overall direction of the company and the slectedion of top executives.
  17. What is corporate governance?
    In a broad sense, describes all the policies, procedures, relationships, and systems in place to oversee the successful and legal operation of the enterprise; in a narrow sense, refers to the responsibilities and performance of the board of directors specifically.
  18. What is a a proxy?
    A document that authorizes another person to vote on behalf of a shareholder in a corporation.
  19. What is a shareholder activism?
    Activities taken by shareholders (individually or in groups) to influence executive decision making in areas ranging from strategic planning to social responsibility.
  20. What are corporate officers?
    The top executives who run a corporation.
  21. What is a chief executive officer (CEO)?
    The highest-ranking officer of a corporation.
  22. What is a merger?
    An action taken by two companies to combine as a single entity.
  23. What is an acquisition?
    An action taken by one company to buy a controlling interest in the voting stock of another company.
  24. What is hostile takeover?
    Acquisition of another company against the wishes of managment.
  25. What is leveraged buyout (LBO)?
    Acquisition of a company's public traded stock, using funds that are primarily borrowed, usually with the intent of using some of the acquired assets to pay back the loans used to acquire the company.
  26. What is strategic alliance?
    A long-term partnership between companies to jointly develop, produce, or sell products.
  27. What is a joint venture?
    A separate legal entity established by two or more companies to pursue shared business objectives.
Card Set:
2013-01-23 22:46:50

Chapter 5 Forms of Ownership
Show Answers: