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Sole Proprietorship
A business owned by one person without a separate business entity. Advantages: no double taxation. Disadvantages: unlimited personal liability, difficulty raising capital.
General Partnership
A business arrangement where two or more persons agree to be co-owners of a business for profit. Can be formed orally, in writing, or implied by conduct.
Limited Partnership
A partnership with at least one general partner and one limited partner. Limited partners have limited liability and do not manage the business.
Uniform Partnership Act (UPA)
A law that fills in gaps not addressed in a partnership agreement, providing default rules for partnerships.
Fiduciary Duty
An obligation of absolute loyalty to another person or entity. Corporate directors, officers, and partners owe fiduciary duties to shareholders and other partners.
Respondeat Superior
A legal doctrine holding employers liable for the negligent conduct of their employees performed within the scope of employment.
Limited Liability Company (LLC)
A business structure with one or more members, offering limited liability to its owners and taxed like a partnership.
Corporation
A legal entity recognized by the state, owned by shareholders, with rights and responsibilities. Can be public or private.
Public Corporation
A corporation with stock traded on public exchanges, subject to government regulations to ensure proper accounting and reporting to shareholders.
Private Corporation
A corporation with a small number of shareholders, not traded on public markets, and not subject to the same reporting requirements as public corporations.
Board of Directors
A group elected by shareholders responsible for corporate policy, hiring officers, and major financial decisions.
Shareholders
Owners of a corporation who have rights to vote on major decisions, receive dividends, and bring lawsuits against the company.
Business Judgment Rule
A principle protecting directors and officers from liability for decisions made in good faith and with a reasonable basis.
S Corporation
A corporation with a limited number of shareholders, offering pass-through taxation and no personal liability for owners.
Professional Corporation (PC)
A corporation for professionals like doctors, limiting liability to investment and not for the errors of other professionals.
Benefit Corporation
A corporation that includes goals beyond profit maximization, such as considering the environment or social impact.
Franchise
A business model where the owner of a trademark or trade name authorizes its use to another, subject to federal and state laws.
Dissolution
The legal ending of a partnership, followed by winding up, which involves settling the partnership's affairs.
Winding Up
The process of settling a partnership's affairs after dissolution, including paying debts and distributing remaining assets.
Apparent Authority
The power of a partner to bind the partnership in contracts, even if acting outside their authority, if the partnership ratifies the act.
Ratification
Acceptance and liability for an act performed by a partner outside their authority, making the partnership responsible.
Partnership by Estoppel
A situation where a person represents themselves as a partner, and a third party relies on this representation to their detriment.
Clawbacks
The recovery of bonuses or stock options given based on erroneous information, such as restated profits or misconduct.
Corporate Veil
The legal distinction between the corporation and its shareholders, protecting shareholders from personal liability except in cases of fraud or injustice.
Antitrust Law
Laws designed to preserve the competitive process in the market.
Sherman Act
A foundational antitrust law that prohibits monopolistic practices and restraints of trade.
Per Se Rules
Actions that are inherently illegal under antitrust laws without needing further analysis.
Rule of Reason
A legal doctrine used to determine if a business practice is anticompetitive by considering its context and impact.
Tying
A practice where the sale of one product is conditioned on the purchase of another product.
Mergers
The combination of two or more companies, which can affect market competition.
Market Shares
The portion of a market controlled by a particular company or product.
Cross Border Enforcement
Application of antitrust laws to activities that affect competition across national borders.
Lina Kahn
Chair of the Federal Trade Commission known for her work on antitrust laws, especially regarding big tech.
Amazon Basics
Amazon's private label brand, often cited in discussions of antitrust concerns.
Trusts
Large business entities that dominate a market, often leading to antitrust actions.
Federal Trade Commission (FTC)
A government agency that enforces antitrust laws and protects consumers.
Standing
The legal right to bring a lawsuit, requiring a direct connection to and harm from the law in question.
Horizontal Restraints
Anticompetitive agreements between competitors at the same level of the market structure.
Bid Rigging
A form of fraud where competitors agree on who will win a bid, undermining the bidding process.
Price Fixing
An agreement between competitors to set prices at a certain level, rather than letting competition in the market determine them.
Territorial Divisions
Agreements between competitors to divide markets geographically to avoid competition.
Group Boycotts
Agreements between businesses to refuse to deal with a particular company or person.
Covenants Not to Compete
Agreements where one party agrees not to enter into or start a similar profession or trade in competition against another party.
Monopoly Power
The ability of a company to control prices and exclude competition in a particular market.
Predatory Pricing
Setting prices low in an attempt to eliminate the competition and then raising prices once competitors are driven out.
Clayton Act
An antitrust law that addresses specific practices that the Sherman Act does not clearly prohibit, such as mergers and interlocking directorates.
Relevant Market
The market in which a company operates, defined by product and geographic area.
Market Share
The percentage of a market accounted for by a specific entity.
Antitrust Division of the Justice Department
The division responsible for enforcing federal antitrust laws.
Consent Decree
A legal agreement that settles a dispute between two parties without admission of guilt.
OEMs (Original Equipment Manufacturers)
Companies that produce parts and equipment that may be marketed by another manufacturer.
Natural Monopoly
A market structure where a single firm can provide a good or service at a lower cost than any competitor, often due to economies of scale.
Economies of Scale
Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.
Treble Damages
A provision that allows a court to triple the amount of the actual/compensatory damages to be awarded to a prevailing plaintiff.
Injunctive Relief
A court-ordered act or prohibition against certain actions.
FTC
Federal Trade Commission, responsible for enforcing antitrust laws and protecting consumers.
Rule of Reason
A legal doctrine used to interpret the Sherman Act, considering the context and impact of a business practice to determine if it is anticompetitive.
Per Se Rule
A legal doctrine under which certain business practices are deemed illegal without the need for further analysis.
Vertical Restraints
Restrictions imposed by a firm at one level of the market on a firm at another level, such as a manufacturer imposing restrictions on a retailer.
Market Power
The ability of a firm to influence the price of a product or terms of sale in the market.
Predatory Pricing
The practice of selling a product at a very low price with the intent to drive competitors out of the market.
Tying Arrangement
A situation where a seller requires the buyer to purchase a second product when buying a primary product.
Monopoly
The exclusive possession or control of the supply or trade in a commodity or service.
Antitrust Laws
Laws designed to promote competition and prevent monopolies.
Sherman Act
A landmark federal statute in the field of competition law passed by Congress in 1890.
Clayton Act
An amendment passed in 1914 that provides further clarification and substance to the Sherman Act on topics such as price discrimination, price fixing, and unfair business practices.
Federal Trade Commission Act
A federal law established in 1914 that outlaws unfair methods of competition and outlaws unfair acts or practices that affect commerce.
Merger
The combination of two or more companies into a single entity, often to increase market share and reduce competition.
Acquisition
The process of acquiring control of another corporation, typically by purchase or stock exchange.
Horizontal Merger
A merger between firms that are selling similar products in the same market.
Vertical Merger
A merger between companies in the same industry but at different stages of production.
Conglomerate Merger
A merger between firms that are involved in totally unrelated business activities.
Anticompetitive Practices
Business practices that reduce or prevent competition in a market.
Price Fixing
An agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price.
Bid Rigging
A form of fraud in which a commercial contract is promised to one party, even though for the sake of appearance several other parties also present a bid.
Market Allocation
An agreement between competitors to divide markets among themselves.
Group Boycott
An agreement by two or more sellers to refuse to deal with a particular person or firm.
Exclusive Dealing
An agreement in which a retailer or wholesaler is tied to purchase from a supplier on the understanding that no other distributor will be appointed or receive supplies in a given area.
Monopolization
The process by which a company gains the ability to raise prices or exclude competitors.
Attempted Monopolization
Actions undertaken by a firm to gain monopoly power, even if they do not succeed.
Predatory Pricing
The practice of selling a product at a very low price with the intent to drive competitors out of the market.
Price Discrimination
The action of selling the same product at different prices to different buyers, in order to maximize sales and profits.
Tying
The practice of making the sale of one good conditional on the purchase of a second distinctive good.
Bundling
The practice of selling multiple products or services together as a single combined unit.
Exclusive Dealing
An arrangement in which a retailer or wholesaler is tied to purchase from a supplier on the understanding that no other distributor will be appointed or receive supplies in a given area.
Resale Price Maintenance
The practice whereby a manufacturer and its distributors agree that the distributors will sell the manufacturer's product at certain prices.
Market Division
An agreement between competitors to divide markets among themselves.
Negligence Per Se
A legal doctrine whereby an act is considered negligent because it violates a statute or regulation.
Joint Tortfeasors
Multiple parties who act together to commit a tort or who contribute to the same tortious act.
Class Action
A lawsuit filed by one or more plaintiffs on behalf of a larger group who are similarly situated.
Res Ipsa Loquitur
A doctrine that infers negligence from the very nature of an accident or injury, in the absence of direct evidence on how any defendant behaved.
Assumption of Risk
A defense in tort law under which a person may not recover for the injuries received from a dangerous activity to which they voluntarily exposed themselves.
Intentional Torts
Torts committed by someone acting with general or specific intent.
Duty of Care
A legal obligation which is imposed on an individual requiring adherence to a standard of reasonable care while performing any acts that could foreseeably harm others.
Proximate Cause
The primary cause of an injury, which is a natural and direct result of the defendant's actions.
Strict Liability
Legal responsibility for damages or injury even if the person found strictly liable was not at fault or negligent.
Punitive Damages
Damages exceeding simple compensation and awarded to punish the defendant.
False Imprisonment
The unlawful restraint of a person against their will by someone without legal authority or justification.
Invasion of Privacy
Intrusion into the personal life of another without just cause, which can give the person whose privacy has been invaded a right to bring a lawsuit for damages.
Defamation
The act of communicating false statements about a person that injure the reputation of that person.
