Vocabulary
What is an entrepreneur?
A person who owns and operates a business
What are some advantages of proprietorships?
They are easy to start, easy to close, retain all profits, complete control of operations, and have simple tax structure.
What is the maximum amount of parties allowed in a partnership?
There is no maximum.
How many people run a proprietorship?
One.
What is one disadvantage of a corporation?
Expensive to form, many governmental relations, or double taxation.
What are expenses?
The costs involved in operating a business
What are some disadvantages of proprietorships?
Unlimited liability, limited expertise, and limited life of business.
What other type of business ownership is a partnership most similar to?
A proprietorship.
Why might a proprietorship be a bad option for business compared to others?
Only one person can own the business.
What is one advantage of a corporation?
Limited liability, ability to raise capital, continued life, transferring ownership, or professional management.
What are Manufacturers?
Businesses that use materials from other producers to make products
What are some common advantages for both a partnership and a proprietorship?
They are both easy to start and have simple tax structure.
What is a name for the contract used to establish a partnership?
The partnership agreement or the articles of partnership.
What contract do you need to start a proprietorship?
There is no contract.
What are some things a corporation can do?
Buy and sell property, hire and fire employees, borrow money, enter into binding contracts, sue or be sued, and make gifts to charitable causes.
What is a proprietorship?
A business that is owned and often operated by a single individual
What order is the organizational structure in a corporation?
Stockholders>Board of Directors>Corporate Officers>Employees
What are some responsibilities of a general partner?
Authority to make decisions, active in day-to-day business operations, and unlimited liability for all partnership debts.
What are the formation costs for a proprietorship?
None.
What is the document used in the process of making a corporation called?
Articles of incorporation.
What is a limited liability company?
A form of business ownership that combines the benefits of a corporation with those of proprietorships and partnerships
What type of business combines the benefits of corporations with a partnership or proprietorship?
A limited liability company.
What is the difference between a limited partner and a general partner?
Limited partners can only invest money while general partners can also make decisions but are liable.
What type of license would be needed if doing business under fictitious name?
A doing business as (DBA) license.
What does the US Supreme Court define a corporation as?
An artificial being, invisible, intangible, and existing only in contemplation of the law.