Chapter 3: Understanding Entrepreneurship, Small Business, and Business Ownershi
Terms
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- The purchase if a company by another, larger firm, which absorbs the smaller company into its operations.
- Acquisition
- A group of individuals elected by a firm's shareholders and charged with overseeing, and taking legal responsibility for the firm's actions.
- Board of Directors
- Document in which the entrepreneur summarizes her or his business strategy for the proposed new venture and how that strategy will be implemented.
- Business Plan
- The person responsible for the firm's overall performance.
- Chief executive officer
- An organization that is formed to benefit its owners in the form or reduced prices and the distribution of surpluses at year-end.
- Co-operative
- Shares whose owners usually have last claim on the corporation's assets but have voting rights in the firm.
- Common stock
- A merger of two firms in completely unrelated businesses.
- Conglomerate merger
- A business considered by law to be a legal entity separate from its owners with many of the legal rights and priveledges of a person; a form of business organization in which the liability of the owners is limited to their investment in the firm.
- Corporation
- Occurs when a company sells part of its existing business operations to another company.
- Divestiture
- A corporation must pay taxes on its profits, and the shareholders must pay personal income taxes on the dividends they receive.
- Double taxation
- An arrangement whereby a corporation buys its own stock with loaned funds and holds it in trust for its employees.
- ESOP employee stock ownership plan
- A business person who accepts both the risks and the opportunities involved in creating and operating a new business venture.
- Entrepreneur
- An arrangement that gives the franchisees (buyers) the right to sell the product of the franchiser (the seller)
- Franchise
- Stipulates the duties and responsibilities of the franchisee and the franchiser.
- Franchising agreement
- An acquisition in which the management of the acquired company welcomes the firm's buyout by another company.
- Friendly takeover
- A partner who is actively involved in managing the firm and has unlimited liability.
- General partner
- A merger of two firms that have previously been direct competitors in the same industry.
- Horizontal merger
- An acquisition in which the management of the acquired company fights the firm's buyout by another company.
- Hostile takeover
- Selling shares of stock in a company for the first time to the general investing public.
- IPO initial public offering
- Members of the corporation's board of directors who are also full-time employess of the corporation.
- Inside directors