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a business owned by one person
Sole Proprietorship
highest-ranked officer of a corporation
CEO
A legal entity, distinct from any individual persons, that has the power to own property and conduct busines
Corporation
which the maximum amount each owner is liable for is equal to whatever amount each invested in the business
Limited Liability
An unincorporated company owned by two or more people
Partnership
whose stock is sold to the general public
Public corporation
should address investment percentages, profit-sharing percentages, management responsibilities and other expectations of each owner, etc.
Partnership Agreement
representatives of the shareholders
Board of Directors
one company simply buys a controlling interest in the voting stock of another company.
Acquisition
What does CTO mean?
Chief Technology Officer
A structure that combines limited liability with the pass-through taxation benefits of a partnership
Limited Liability Corporation (LLC)
authorizes another person to vote on behalf of a shareholder in a corporation
Proxy
two companies join to form a single entity either by pooling their resources or by one company purchasing the assets of the other.
Merger
an action that allows the companies to collaborate without formally combining?
Strategic Alliance
activities taken by shareholders (either individually or in groups) to influence executive decision making in areas ranging from strategic planning to social responsibility
Shareholder Activism
when companies in unrelated industries join to form a single entity
Conglomerate Merger
a profit-seeking corporation whose charter specifies a social or environmental goal that the company must pursue in addition to profit
Benefit Corporation
Starbucks and Target is an example of this
Strategic Alliance
Describe the ladder of how a corporation uses Board of Directors, employees, shareholders, and corporate officers (Who hires/chooses who)
Shareholders elect Board of Directors, Board of Directors hire Corporate Officers, Corporate Officers hire Employees
the acquisition of another company against the wishes of management
Hostile Takeover
Name at least 4 advantages of a Sole Proprietorship
1. Simplicity – It is easy to establish and requires less paperwork than other structures
2. Single layer of taxation – Profit is treated as the owner’s personal income and is taxed accordingly
3. Privacy – There are no reports to be filed beyond tax returns and certain government reports
4. Flexibility and control – The sole proprietor can make decisions without input from shareholders or partners
5. Fewer limitations on personal income – The sole proprietor can keep all after-tax profits
6. Personal satisfaction
a partnership that is allowed to raise money by selling units of ownership to the general public
Master Limited Partnership
Three groups play key roles in corporate governance
Shareholders, Board of Directors, Corporate Officers
Name at least 4 Disadvantages of a Corporation
•Cost and complexity
•Reporting requirements
•Managerial demands
•Possible loss of control
•Double taxation
•Short-term orientation of the stock market
Acquisition of a company’s publicly traded stock, using funds that are primarily borrowed
Leveraged Buyout (LBO)