Foundations of Business - Chapter 4: Choosing a Form of Business Ownership

These flashcards cover key terms and concepts from Chapter 4 on forms of business ownership, including advantages and disadvantages, types of partnerships and corporations, and special forms of business.

Sole Proprietorship

A business that is owned and usually operated by one person.

Unlimited Liability

A legal concept that holds a business owner personally responsible for all the debts of the business.

Partnership

A voluntary association of two or more persons to act as co-owners of a business for profit.

General Partner

A person who assumes full or shared responsibility for operating a business.

Limited Partner

A person who invests money in a business but has no management responsibility or liability for losses beyond their investment.

Articles of Partnership

An agreement listing and explaining the terms of the partnership.

Corporation

An artificial person, created by law, with most of the legal rights of a real person.

Stockholder

A person who owns a corporation’s stock.

Limited Liability

A feature of corporate ownership that limits each owner’s financial liability to the amount of money they have invested.

Joint Venture

An agreement between two or more groups to form a business entity for a specific goal.

Merger

The combining of two corporations or other business entities to form one business.

S Corporation

A corporation that is taxed as though it were a partnership, limiting taxation to the personal income of its stockholders.

Limited-Liability Company (LLC)

A form of business ownership that combines the benefits of a corporation and a partnership.

Not-for-Profit Corporation

A corporation organized to provide a social, educational, or religious service rather than to earn a profit.

Syndicate

A temporary association of individuals or firms organized to perform a specific task that requires a large amount of money.