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business chapter 4

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one of the most popular and easiest to establish forms of business in the united states is
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sole proprietorship
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an individual who is the sole owner of a business faces ________ liability in case of debt
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unlimited
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the least used form of business organization in the US
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partnership
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the decision making process in a partnership tends to be faster when the partnership is
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small
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in a partnership, owners must share _______________, even though a bad decision may have been taken by one of them
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business responsibility
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another often-used name for a stock holder is
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shareholder
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a ______________________ is one whose stocks anyone may buy, sell or trade
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public corporation
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the organizational form that many consider to be a blend of the best characteristics of corporations, partnerships, and sole proprietorships is the __________________.
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limited liability company
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When two companies combine to form a new company
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merger
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when companies operating at different, but related, levels of an industry merge
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vertical merger
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XYZ, Inc. is attempting to avoid a hostile takeover by a corporate raider by allowing stockholders to buy more shares of stock at prices lower than current market value; what method is used to avoid takeover
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poison pill
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owned and operated by one person
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sole proprietorship
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how many people are typically employed in sole proprietorship
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fewer than 50
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advantages of sole proprietorship
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-ease and cost of formation -secrecy -distribution and use of profits -flexibility -very little gov regulation -taxation -closing the business
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disadvantages of sole proprietorship
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-unlimited liability -limited sources of funds -lack of continuity -lack of qualified employees -taxation
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how many people run a partnership
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two or more
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general partnership
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complete sharing in the management
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limited partnership
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one partner assumes unlimited liability and one whose liability is limited to their investment in the business
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advantages of partnership
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-ease of organization -availability of capital and credit -combined knowledge -decision making – regulatory controls
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disadvantages of partnership
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-unlimited liability -business responsibility -life of the partnership -distribution of profits -limited source of funds
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which group requires the most skills
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corporations
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corporation
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it is a legal entity, created by the state, whose assets and liabilities are separate from its owners
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who has the right to receive, own and transfer property
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corporations
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who accounts for the majority of US sales and income
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corporations
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private corporations
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owned by just one or a few people who are closely involved in managing the business
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which type of corporation owns all stocks and none is sold to the public
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private corporation
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public corporation
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corporation whose stock anyone may buy, sell or trade
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quasi-public corporation
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owned and operated by the federal, state or local government. their focus is to provide service to citizens
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non-profit corporation
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focus on providing service rather than earning profit, but not owned by the government
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preferred stock
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do not have any say, they have a claim to profits before any other stock holders do
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common stock
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have voting rights, do not receive preferential treatment regarding dividends
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joint venture
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partnership established for a specific project or for a limited time
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S corporation
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form of business ownership that is taxed as though it were a partnership
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limited liability company
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form of ownership that provides limited liability and taxation like a partnership but places fewer restriction on members
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horizontal mergers
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make and sell the same and then merge
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vertical mergers
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different products merge
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corporate raider
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wants to take over another company
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poison pill
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firm allows stock holders to buy more shares of stock at prices lower than current value
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white knight
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more acceptable firm that is willing to acquire the threatened company
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shark repellant
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management requires a large majority of stock holders to approve takeover