Chapter 6 Study Guide: Forms of Business Ownership

A collection of flashcards covering key concepts of Chapter 6 on Forms of Business Ownership, focusing on definitions, pros and cons, and various business structures.

Sole Proprietorship

A business owned and operated by one individual.

Partnership

A business owned by two or more individuals, who share profits and responsibilities.

General Partnership

A type of partnership where all partners share liabilities and management responsibilities.

Limited Partnership

A partnership consisting of at least one general partner and one limited partner, where limited partners have restricted liability.

Corporation

A separate legal entity owned by shareholders with limited liability.

C Corporation

A type of corporation that is taxed separately from its owners.

S Corporation

A corporation that meets specific Internal Revenue Code requirements to avoid double taxation.

Limited Liability Company (LLC)

A hybrid business structure that combines the benefits of partnerships and corporations, offering limited liability and pass-through taxation.

Cooperative

A business owned and operated by a group of individuals for their mutual benefit.

Franchise

A licensing agreement wherein a franchisee uses a company’s brand and business model.

Merger

The combination of two companies to form one new company.

Acquisition

The process of one company buying another company.

Limited Liability

A legal structure that protects owners' personal assets from business debts.

Double Taxation

Taxation at both the corporate level and again as dividends to shareholders.

Continuity

The ability of a business to continue operating independently of the ownership structure.

Unlimited Liability

A condition in which a business owner is personally liable for all debts and obligations of the business.