Home > Preview
The flashcards below were created by user
on FreezingBlue Flashcards.
What is a Sole Proprietorship?
- It is a business owned and usually operated by one person.
- Some have many.
- Simplest form of business.
What are some of the most common forms of business ownership? (Sole Proprietorship)
- The service industry
Advantages of Sole Proprietorship
- Ease of start-up and closure
- Pride of ownership
- Retention of all profits
- No special tax
- Flexibility of being your own boss
Disadvantages of Sole Proprietorship
- Unlimited Liability
- Lack of continuity
- Lack of money
- Limited management skills
- Difficulty in hiring employees
What is a partnership?
Is as voluntary association of two or more persons to act as co-owners of a business.
What is a general partner?
- Is a person who assumes full or shared responsibility for operating a business.
- Owned by two or more co-owners.
- If one withdraws from partnership must give notice to creditors, customers, and suppliers.
What is a limited partner?
- Is a person who invests money in a business but who has no management responsibility or liability for losses beyond his or her investment in the partnership.
- General partners collect management fees and receive a percentage of profits.
- Limited partners receive a portion of profits and tax benefits.
What are Articles of Partnership and what are they part of?
- They are an agreement listing and explaining the terms of the partnership.
- They belong to the Partnership Agreement.
What are the forms of agreements?
- Oral and written.
- Both of them are legal and can be enforced by courts, although a written agreement has more advantages.
What are the advantages of Partnership?
- Ease of start-up.
- Availability of capital and credit.
- Personal interest.
- Combined business skills and knowledge.
- Retention of profits.
- No special taxes.
What are the disadvantages of partnership?
- Unlimited liability.
- Management disagreements.
- Lack of continuity.
- Frozen investment.
What is a corporation?
Is an artificial person created by law with most of the legal rights of a real person, including the rights to start and operate a business, to buy or sell property, to borrow money, to sue or be sued, and to enter into binding contracts.
What is stock?
Is the shares of ownership of a corporation.
What is a stockholder?
Is a person who owns a corporation's stock.
What is a closed corporation?
Is a corporation whose stock is owned by relatively few people and is not sold to the general public.
What is an open corporation?
Is a corporation whose stock can be bought and sold by any individual.
What is a domestic corporation?
Is a corporation in the state in which it is incorporated.
What is a domestic corporation?
- Is a corporation in the state in which it is incorporated.
- In all other states where it does business it is called foreign corporation.
What is a foreign corporation?
Is a corporation in any state in which it does business except the one in which it is incorporated.
What is an alien corporation?
- Is a corporation chartered by a foreign government and conducting business in the United States.
- Examples; VW, Sony, Royal Dutch/Shell Corporations.
What are the two types of stock?
- 1. Common Stock.
- 2. Preferred Stock.
What is Common Stock?
Is owned by individuals or firms who may vote on corporate matters but whose claims on profits and assets are subordinate to the claims of others.
What is preferred stock?
Is owned by individuals or firms who usually do not have voting rights but whose claims on dividends are paid before those of common-stock owners.
What is a dividend?
Is a distribution of earnings to the stockholders of a corporation.
What is a proxy?
Is a legal form listing issues to be decided at a stockholders' to transfer their voting rights to some other individual or individuals.
What is the board of directors?
Is the top governing body of a corporation, the members of which are elected by the stockholders.
What are corporate officers?
Are the chairman of the board, president, executive vice presidents, corporate secretary, treasurer, and any other top executive appointed by the board of directors.
What is limited liability?
Is a feature of corporate ownership that limits each owner's financial liability to the amount of money that he or she has paid for the corporation's stock.
What is the hierarchy of corporate structure?
- Stockholders (owners) elect board of directors.
- Board of directors appoint officers.
- Officers hire employees.
What are the advantages of corporations?
- Limited liability.
- Ease pf raising capital.
- Ease of transfer of ownership.
- Perpetual life.
- Specialized management.
What are the disadvantages of corporations?
- Difficulty and expense of formation.
- Government regulation and increased paperwork.
- Conflict within the corporation.
- Double taxation.
- Lack of secrecy.
What are the special types of business ownership?
- Limited-Liability Companies.
- Non-for-Profit Corporations.
What is an S-Corporation?
Is a corporation that is taxed as thought it were a partnership.
What is a limited-liability company?
Is a form of business ownership that combines the benefits of a corporation and a partnership while avoiding some of the restrictions and disadvantages of those forms of ownership.
What is a not-for-profit corporation?
Is a corporation organized to provide a social, educational, religious, or other service rather than to earn a profit.
What is a joint venture?
Is an agreement between two or more groups to form a business entity in order to achieve a specific goal or to operate for a specific period of time.
What is a Syndicate?
Is a temporary association of individuals or firms organized to perform a specific task that requires a large amount of capital.
What is a merger?
Is the purchase of one corporation by another.
What is a hostile takeover?
Is a situation in which the management and board of directors of a firm targeted for acquisition disapprove of the merger.
What is a tender offer?
Is an offer to purchase the stock of a firm targeted for acquisition at a price just high enough to temp stockholders to sell their shares.
What is a proxy fight?
Is a technique used to gather enough stockholder votes to control a targeted company.