Sole Proprietorships & Partnerships
The most common form of business organization in the United States.
(A: Sole Proprietorship)
A legal entity whose assets and liabilities are separate from its owners.
(A: Corporation)
When two companies that sell similar products to the same customers join together.
(A: Horizontal Merger)
Individuals who try to take over a company by buying large amounts of stock at a high price.
(A: Corporate Raiders)
You and your friend start a business. You both have unlimited liability. What is this?
(A: General Partnership)
This disadvantage means the owner is personally responsible for all business debts.
(A: Unlimited Liability)
These people are the actual owners of a corporation.
Stockholder/shareholders
When a company merges with its supplier or a customer (e.g., a car maker buying a tire company).
(A: Vertical Merger)
Allowing stockholders to buy shares at lower prices to make a takeover too expensive for a raider.
(A: Poison Pill)
A bank buys another bank in the next town over. What type of merger is this?
(A: Horizontal Merger)
A legal document that explains how assets and profits will be shared between owners.
(A: Articles of Partnership)
This group is elected by stockholders to oversee the general operation of the business.
(A: Board of Directors)
When companies in completely unrelated industries merge.
(A: Conglomerate Merger)
Finding a "friendlier" company to buy your company instead of a corporate raider.
(A: White Knight)
You own stock in a company. If it fails, you only lose your investment, not your house. This is called?
(A: Limited Liability)
This partner has no voice in management and their liability is limited to their investment.
(A: Limited Partner)
A corporation taxed like a partnership with no more than 100 stockholders.
(A: S-Corporation)
A group of investors borrows up to 95% of the money to buy a company, using the company's assets as collateral.
(A: Leveraged Buyout / LBO)
Management requires a very large majority of stockholders to approve a takeover.
(A: Shark Repellent)
A clothing brand buys a soft drink company and a construction firm. What is this?
(A: Conglomerate Merger)
True or False: Sole Proprietorships are usually taxed as individual income, not at a corporate rate.
(A: True)
A person who is a full-time employee of the company and also sits on the Board of Directors.
(A: Inside Director)
The purchase of one company by another, usually by buying its stock.
(A: Acquisition)
Taking on a large amount of this makes a company less attractive to a raider.
(A: Debt)
This hybrid business form protects personal assets but is taxed like a partnership.
(A: Limited Liability Company / LLC)