MIE chapter 4

sole proprietorships

A business owned and operated by one person, where the owner has full control and is personally responsible for the business’s profits, losses, and debts. It is the most common form of business ownership in the United States

General Partnership

A business owned by two or more people who share management responsibilities, profits, losses, and personal liability for the business’s debts

Limited Partnership

A partnership with at least one general partner who runs the business and is fully responsible for its debts, and limited partners who can only lose the money they invested but do not participate in the management

Articles of Partnership

A legal document that explains the rules of a partnership, including each partner’s responsibilities, ownership, and how profits and losses are shared

Stock

A share of ownership in a corporation that can be bought or sold

Dividends

A portion of a corporation’s profits that is paid to its stockholders (owners), usually in the form of cash

Corporate Charter

A legal document issued by the state that officially gives a corporation the right to operate as a corporation

Private Corporation

A corporation owned by one or a small number of people, who are usually involved in running the business. Its stock is not sold to the general public

Public Corporation

A corporation whose stock can be bought and sold by the general public

Initial Public Offering (IPO)

The first time a corporation sells its stock to the public

Quasi-Public Corporation

A corporation owned and operated by a government (federal, state, or local) that provides services to the public

Nonprofit Corporation

A corporation created mainly to provide a service or support a cause rather than make a profit and is not owned by the government

Board of Directors

A group elected by stockholders to oversee the corporation and make important long-term decisions and goals

Preferred Stock

Stock that usually does not have voting rights, but its owners get priority when dividends are paid

Common Stock

Stock that gives owners voting rights in the corporation, but they receive dividends after preferred stockholders

Joint Venture

A partnership created by two or more parties for one specific project or a limited period of time

S Corporation

A corporation that provides limited liability but is generally taxed like a partnership, with certain restrictions on shareholders

Limited Liability Company (LLC)

A business structure that gives owners limited personal liability while generally allowing partnership-style taxation and fewer ownership restrictions than an S corporation

Cooperative (Co-op)

A group of people or small businesses that join together to gain benefits they might not be able to get on their own

Merger

When two companies combine to create one company

Acquisition

When one company buys another company, often by purchasing its stock

Leveraged Buyout (LBO):

When investors borrow a large amount of money to buy a company and use the purchased company’s assets to help secure the loan