Business Dynamics Ch 5

sole proprietorship

business owned & managed by one person

partnership

two or more people own a business

general partnership

all owners share in operating business and assuming debt

limited partnership

owner who invests but does not manage business

master limited partnership (MLP)

acts like a corp and traded on stock marked but taxed like a partnership

limited liability partnership (LLP)

limits partnership risk of losing personal assets

corporation

legal entity with authority to act and have liability apart from its owners

conventional (C) corp

state charted with authority to act and have liability separate from stockholders

S corp

like a corporation but taxed like a sole proprietorship and partnership

limited liability company (LLC)

company similar to S corp but no eligibility requirements

merger

result of two firms joining to form one company

acquisition

company buying property and obligation of another

vertical merger

joins two firms operating in different stages of a related business

horizontal merger

joins two firms in the same industry

conglomerate merger

combines two businesses in different industry

leveraged buyout (LBO)

an attempt by stakeholders to buyout a company

franchise agreement

someone with a business idea sells the rights to use the name and sell the products to others

coattail effect

the fellow franchise does something that has an impact on growth and profitability

cooperative (co-op)

owned and controlled but the people who use it