Vocabulary
What does LLC stand for?
LLC stands for Limited Liability Company.
Who are called the owners of a corporation?
Shareholders are considered the owners of a corporation.
What form of ownership has two or more owners and does not require a charter?
A partnership is owned by two or more individuals and does not require a state charter to operate.
What is the most common form of business organization?
The sole proprietorship is the most common form of business organization.
Define Franchise.
A business established or operated under an authorization to sell or distribute a company's goods or services in a particular area.
What is a unit of ownership in a corporation called?
A unit of ownership in a corporation is called a stock or share
What form of ownership requires a charter from a state?
A corporation requires a charter from the state to legally operate.
What form of ownership has the advantage of pooled skills and abilities?
A partnership benefits from the combined skills and abilities of its partners.
What form of ownership is easiest to start?
A sole proprietorship is the easiest and simplest form of business to start.
What type of corporation operates to fulfill a specific mission other than earning income?
A nonprofit corporation operates to fulfill a specific mission other than generating profit.
What is the definition of a business plan?
A business plan is a formal written document detailing the goals of a business, the strategy to achieve them, and the time frame for success.
If a company fails, what are shareholders responsible for?
In a corporation, shareholders have limited liability and are generally not personally responsible for the company's debts beyond their investment.
What is the difference between a general partner and a limited liability partner?
A general partner has unlimited liability and actively manages the business, while a limited partner has liability limited to their investment and typically does not participate in day-to-day management.
Illness or loss of life can close this form of ownership.
A sole proprietorship may cease to exist upon the illness or loss of life of the owner.
What is a SWOT analysis?
A SWOT analysis is a strategic planning tool used to identify an organization's Strengths, Weaknesses, Opportunities, and Threats.
What is an entrepreneur?
An entrepreneur is an individual who starts and runs a business, taking on financial risks in the hope of profit.
What is the governing body of a corporation?
The board of directors serves as the governing body of a corporation.
What form of ownership has the advantage of multiple sources of capital?
A partnership can access multiple sources of capital through its partners.
What type of ownership is most risky and the owner does not share profits?
A sole proprietorship is considered the most risky, with the owner bearing all risks and retaining all profits.
What form of ownership has the disadvantage of double taxation?
A corporation may face double taxation, where profits are taxed at the corporate level and dividends taxed at the shareholder level.