business 101 chapter 4

sole proprietorship

businesses owned and operated by one individual; the most common form of business organization in the united states

partnership

a form of business organization defined by the uniform partnership act as "an association of two or more persons who carry on as cowers of a business for profit

general partnership

a partnerships that involves a complete sharing in both the management and the liability of the business

limited partnership

a business organization that has at least one general partner, who assumes unlimited liability, and at least one limited partner, whose liability is limited to his or her investment in the business

articles of partnership

legal documents that set forth the basic agreement between partners

corporation

a legal entity, created by the state, whose assets and liabilities are separate from its owners

stock

shares of a corporation that may be bought or sold

dividends

profits of a corporation that are distributed in the form of cash payments to stockholders

corporate charter

a legal document that the stet issues to a company based on information the company provides in the articles of incorporation

private corporation

a corporation owned by just one or a few people who are closely involved in managing the business

public corporation

a corporation whose stock anyone may buy, sell, or trade

initial public offering (IPO)

selling a corporation's stock on public markets for the first time

quasi-public corporations

corporations owned and operated by the federal, state, or local government

nonprofit corporations

corporations that focus on providing a service rather than earning a profit but are not owned by a government entity

board of directors

a group of individuals, elected by the stockholders to oversee the general operation of the corporation, who set the corporation's long-range objectives

preferred stock

a special type of stock whose owners, though not generally having a say in running the company, have a claim to profits before other stockholders do

common stock

stock whose owners have voting rights in the corporation, yet do not receive preferential treatment regarding dividends

joint venture

a partnership established for a specific project or for a limited time

S corporation

corporation taxed as though it were a partnership with restrictions on shareholders

limited liability company (LLC)

form of ownership that provides limited liability and taxation like a partnership but places fewer restrictions on members

cooperative (co-op)

an organization composed of individuals or small businesses that have banded together to reap the benefits of belonging to a larger organization

merger

the combination of two companies (usually corporations) to form a new company

acquisition

the purchase of one company by another, usually by buying its stock

leveraged buyout (LBO)

a purchase in which a group of investors borrows money from banks and other institutions to acquire a company (or a division of one), using the assets of the purchased company to guarantee repayment of the loan

They pay taxes at the income tax rate for individuals

how does taxation work in partnerships

private corporation

the corporation whose stock is not traded in public markets.

vertical merger

the type of merger when companies operating at different but related levels of an industry merge; results when one corporation merges with one of its customers or suppliers.

public

what corporation finds it easiest to raise money because it can issue stocks or bonds when it needs to raise capital.

poison pill

A __________ allows stockholders to buy more shares of stock at prices lower than current market value to deter a hostile takeover

horizontal merger

when firms that make and sell similar products to the same customers merge, it is known as _____

conglomerate merger

when two firms in unrelated industries merger

shark repellant

management requires a large majority of stockholders to approve the takeover

white knight

a more acceptable firm that is willing to acquire the threatened company