1
a business owned by one person
Sole Proprietorship
a legal entity, distinct from any individual persons, that has the power to own property and conduct business
Corporation
have joint authority to make decisions for the firm and joint liability for the firm’s financial obligations
General Partnership
Highest ranking corporate officer
CEO
Sole proprietors have _______ Liability
Unlimited
responsible for selecting corporate officers, guiding corporate affairs, reviewing long-term plans, making major strategic decisions, and overseeing financial performance
Board of Directors
action taken by two companies to combine as a single entity
Merger
Investors who purchase shares of stock in a corporation
Shareholders
form of ownership in which all the stock is owned by only a few individuals or companies and is not made available for purchase
Private corporation
should address investment percentages, profit-sharing percentages, management responsibilities and other expectations of each owner, decision-making strategies, succession and exit strategies, criteria for admitting new partners, and dispute-resolution procedures.
Partnership agreement
Name 3 advantages and disadvantages of a Corporation
AD: Ability to raise capital, Liquidity, Longevity, Limited liability
Dis: Cost and complexity, Reporting requirements, Managerial demands, Possible loss of control, Double taxation, Short-term orientation of the stock market
NBC and Disney creating Hulu is an example of what?
Joint Venture
Name 3 Advantages & Disadvantages of a sole proprietorship
Advantages: Simplicity, Single layer of taxation, Privacy, Flexibility and control, Fewer limitations on personal income, Personal satisfaction
Disadvantages:
Financial liability, Demands on the owner in terms of time, stress and decision making, Limited managerial perspective, Resource limitations, No employee benefits for the owner, Finite life span
Name 3 advantages and disadvantages of a partnership
AD: Simplicity, Single layer of taxation, More resources, Cost sharing, Broader skill and experience base, Longevity
Dis: Unlimited liability, Potential for conflict, Expansion, succession, and termination issues
a partnership that is allowed to raise money by selling units of ownership to the general public
Master Limited Partnership (MLP)
acquisition of a company’s publicly traded stock using borrowed funds
Leveraged Buyout (LBO)
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 what?
Strategic Alliance
all the policies, procedures, relationships, and systems to oversee the successful and legal operation of the enterprise
Corporate Governance
structure is recommended for most small companies that aren’t sole proprietorships
LLC
which authorizes management to vote on their behalf
Proxy
Name 2 Advantages, and 2 disadvantages of Mergers/Aquisitions
Advantages:
•Increase their buying power as a result of their larger size
•Increase revenue by cross-selling products to each other’s customers
•Increase market share by combining product lines
•Gain access to new expertise, systems, and teams of employees
Disadvantages:
•Executives have to agree on how the merger will be financed.
•Managers need to decide who will be in charge after they join forces.
•Marketing departments need to figure out how to blend product lines, branding strategies, and advertising and sales efforts.
•Companies must often deal with layoffs.
the acquisition of another company against the wishes of management; the buyer tries to convince enough shareholders to go against management and vote to sell
Hostile Takeover
A type of ownership.. must meet certain criteria, including a maximum of 100 investors, all of whom must be U.S. residents. A major benefit of this structure is single layer of taxation
S Corporation
each partner has unlimited liability only for his/her own actions and at least some degree of limited liability for the partnership as a whole
Limited Liability Partnership (LLP)