Management 100 – Chapter 6 – Business Structures – Flashcards
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Sole Proprietorship
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A business that is owned, and usually managed, by one person
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Partnership
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A legal form of business with two or more parties
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Corporation
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A legal entity with authority to act and have liability separate from its owners
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Liability
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The responsibility to pay all normal debts and to pay because of a court order or law, for performance under a contract, or payment of damages to a person or property in an accident
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Unlimited Liability
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The responsibility of business owners for all of the debts of the business
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General Partnership
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A partnership where all owners share in operating the business and in assuming liability for the business's debts
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Limited Partnership
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A partnership with one or more general partners and one or more limited partners
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General Partner
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An owner who has unlimited liability and is active in managing the firm
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Limited Partner
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an owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment
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Limited Liability
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The responsibility of a business's owners for losses only up to the amount they invest; limited partners and shareholders have limited liability
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Limited Liability Partnership
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A partnership that limits partner's risk of losing their personal assets to only their own acts and omissions of people under their supervision
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Partnership Agreement
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Legal document that specifies the rights and responsibilities of each partner
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Public Corporation
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Corporation that has the right to issue shares to the public, so its shares may be listed on a stock exchange
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Private Corporation
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Corporation that is not allowed to use stock to the public, so its shares are not listed on stock exchange (limited to 50 shareholders)
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Corporate Governance
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The process and policies that determine how an organization interacts with its stakeholders, both internal and external
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Articles of Incorporation
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A legal authorization from the federal or provincial/territorial government for a company to use the corporate format
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Merger
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The result of two firms forming one company
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Acquisition
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One company's purchase of the property and obligations of another company
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Vertical Merger
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The joining of two companies involved in different stages of related businesses
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Horizontal Merger
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The joining of two firms in the same industry
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Conglomerate Merger
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The joining of firms in completely unrelated industries
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Leveraged Buyout
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An attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing
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Franchise Agreement
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An arrangement where someone with a good idea for a business sells the rights to use the business name and sell its goods and services in a given territory
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Franchisor
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A company that develops a product concert and sells others the rights to make and sell the products
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Franchise
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the right to use a specific business's name and sell its goods or services in a given territory
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Franchisee
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A person who buys a franchise
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Co-operative
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An organization that is owned by members and customer, who pay an annual membership fee and share in any profits
