BA 11 Chapter 4 (Forms of Business Ownership)

alien corporation

companies from abroad (ex. Sony, BMW, Evian)

foreign corporation

a corporation is a foreign corporation in all states other than the "home state"

domestic corporation

call this in the state where it is incorporated; in its "home state"

open corporation

stocks of the corporation can be bought and sold publicly; companies' stock are on the stock market

closed corporation

owned by a few people and not sold to the public

perpetual life

it exists as long as people own the stock (perpetual = never ending)

double taxation

corporations pays taxes and the stockholder pays tax on their dividends

stock

tiny pieces of a company's overall ownership, which gives the buyer a proportional stake in its assets and profits

stockholder/shareholder

owners of parts of a corporation

Board of Directors

the top governing body of a corporation

limited liability

financial liability is the price paid for the stock (corporation)

limited partner

contributes capital only; doesn't have a say in management issues and doesn't have any liability beyond the money they have invested (partnership)

general partner

co-owns the business and shares liability for everything the business does (partnership)

unlimited liability

the owner is personally responsible for all debt of the business (sole proprietorship)

horizontal merger

a merger of 2 of more companies with a similar product lines ←→

vertical merger

merger of a vender and a customer ↓↑

conglomerate merger

mergers of firms in completely different industries