Acquisition
the purchase of one company by another
Board of Directors
governing body of a corporation that reports to its shareholders and delegates power to run its day-to-day operations while remaining responsible for sustaining its assets
Business Plan
document in which the entrepreneur summarizes his or her business strategy for the proposed new venture and how that strategy will be implemented
Chief Executive Officer (CEO)
top manager who is responsible for the overall performance of a corporation
Closely Held (or Private) Corporation
corporation whose stock is held by only a few people and is not available for sale to the general public
Cooperative
form of ownership in which a group of sole proprietorships or partnerships agree to work together for common benefits
Corporate Governance
roles of shareholders, directors, and other managers in corporate decision making and accountability
Corporation
business that is legally considered an entity separate from its owners and is liable for its own debts; owners liability extends to the limits of their investments
Divestiture
strategy whereby a firm sells one or more of its business units
Double Taxation
situation in which taxes may be payable both by a corporation on its profits and by shareholders on dividend incomes
Employee Stock Ownership Plan (ESOP)
arrangement in which a corporation holds its own stock in trust for its employees, who gradually receive ownership of the stock and control its voting rights
Entrepreneur
business person who accepts both the risks and the opportunities involved in creating and operating a new business venture
Entrepreneurship
the process of seeking business opportunities under conditions of risk
Established Market
one in which many firms compete according to relatively well-defined criteria
First-Mover Advantage
any advantage that comes to a firm because it exploits an opportunity before any other firm does
Franchise
arrangement in which a buyer (franchisee) purchases the rights to sell the good or service of the seller (franchiser)
General (or Active) Partner
partner who actively manages a firm and who has unlimited liability for its debts
General Partnership
business with two or more owners who share in both the operation of the firm and the financial responsibility for its debts
Institutional Investor
large investor, such as a mutual fund or a pension fund, that purchases large blocks of corporate stock
Joint Venture
strategic alliance in which the collaboration involves joint ownership of the new venture
Limited Liability
legal principle holding investors liable for a firm's debts only to the limits of their personal investments in it
Limited Liability Corporation (LLC)
hybrid of a publicly held corporation and a partnership in which owners are taxed as partners but enjoy the benefits of limited liability
Limited Partner
partner who does not share in a firm's management and is liable for its debts only to the limits of said partner's investment
Limited Partnership
type of partnership consisting of limited partners and a general (or managing) partner
Master Limited Partnership
form of ownership that sells shares to investors who receive profits and that pays taxes on income from profits
Merger
the union of two corporations to form a new corporation
Multinational (or Transnational) Corporation
form of corporation spanning national boundaries
Niche
a segment of a market that is not currently being exploited
Officers
top management team of a corporation
Professional Corporation
form of ownership allowing professionals to take advantage of corporate benefits while granting them limited business liability and unlimited professional liability
Publicly Held (or Public) Corporation
corporation whose stock is widely held and available for sale to the general public
S Corporation
hybrid of a closely held corporation and a partnership, organized and operated like a corporation but treated as a partnership for tax purposes
Small Business
independently owned business that has relatively little influence in its market
Small Business Administration (SBA)
government agency charged with assisting small businesses
Small Business Development Center (SBDC)
SBA program designed to consolidate information from various disciplines and make it available to small businesses
Small Business Investment Company (SBIC)
government regulated investment company that borrows money from the SBA to invest in or lend to a small business
Sole Proprietorship
business owned and usually operated by one person who is responsible for all of its debts
Spin Off
strategy of setting up one or more corporate units as new, independent corporations
Stockholder (or Shareholder)
owner of shares of stock in a corporation
Strategic Alliance
strategy in which two or more organizations collaborate on a project for mutual gain
Tender Offer
offer to buy shares made by a prospective buyer directly to a target corporation's shareholders, who then make individual decisions about whether to sell
Unlimited Liability
legal principle holding owners responsible for paying off all debts of a business
Venture Capital Company
group of small investors who invest money in companies with rapid growth potential