Glossary of Bus 010 Understanding Business - Chapter 5
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- Sole Proprietorship
- A business that is owned and usually managed, by one person.
- A legal form of business with two or more owners.
- A legal entity with authority to act and have liability separate from its owners.
- Unlimited liability
- The responsbility of business owners for all of the debts of 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.
- General Partner
- An owner (partner) who has unlimited liability and is active in managing the firm.
- Limited Partner
- An owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment.
- Limited Liability
- The responsibility of a business's owners for losses only up the amount they invest; limited partners and shareholders have limited liability.
- Master Limited Partnership (MLP)
- A partnership that looks much like a corporation (in that it acts like a corporation and is traded on a stock exchange) but is taxed like a partnership and thus avoids the corporate income tax.
- Limited Liability Partnership (LLP)
- A partnership that limits partners' risk of losing their personal assets to only their own oacts and omissions and to the acts and omissions of people under their supervision.
- Conventional (C) Corporation
- A state-chartered legal entity with authority to act and have the liability separate from its owners.
- S Corporation
- A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships.
- Limited Liability Company (LLC)
- A company similar to an S corporation but without the special eligibility requirements.
- The result of two firms forming one company.
- One company's purchase of the property and obligations of another company.
- Vertical merger
- The joining of two companies involved in different stages of related businesses.
- Horizontal merger
- The joining of two firms in the same industry.
- Conglomerate merger
- The joining of firms in completely unrelated industries.
- Leveraged buyout (LBO)
- An attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing.
- Franchise agreement
- An arragnement whereby someone with good idea for a business sells the rights to use the business name and sell a product or service to others in a given territory.
- A company that develops a product concept and sells others the rights to make and sell the products.
- A person who buys a franchise.
- A business owned and controlled by the people who use it - producers, consumers, or workers with silimar needs who pool their resources for mutual gain.
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