Ch 5 - Business Ownership and Structures

These flashcards cover key terms and concepts related to business ownership structures, advantages and disadvantages of different types of businesses, and important definitions relevant to the course material.

Sole Proprietorship

A business owned, and usually managed, by one person.

Partnership

A legal form of business with two or more owners.

Corporation

A legal entity with authority to act and have liability separate from its owners.

Limited Liability

The responsibility of owners for losses only up to the amount they invest in the business.

General Partnership

A partnership in which all owners share in operating the business and in assuming liability for the business’s debts.

Limited Partnership

A partnership with one or more general partners and one or more limited partners.

Franchise

An arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell a product or service to others.

Merger

The result of two firms forming one company.

Acquisition

One company’s purchase of the property and obligations of another company.

Leveraged Buyout (LBO)

An attempt by employees, management, or a group of private investors to buy out the stockholders in a company.

Cooperative (Co-Op)

A business owned and controlled by the people who use it, pooling resources for mutual gain.

C Corporation

A state-chartered legal entity that acts and has liability separate from its owners.

S Corporation

A government creation that looks like a corporation but is taxed like sole proprietorships and partnerships.

Limited Liability Company (LLC)

A flexible form of enterprise that blends elements of partnership and corporate structures.

Ethnic Business Centers

Cities with a high concentration of minority-run firms, promoting diversity in business ownership.

B Corp

Mission-based companies certified for meeting social and environmental performance standards.