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| A business owned, and usually managed, by one person. |
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| A legal form of business with two or more owners. |
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| A legal entity with authority to act and have liability separate from its owners. |
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The responsibility of business owners for all of the debts of the business. |
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it is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations.
Major Types of Partnerships
•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. |
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Definition
| is a legal status where a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership. If a company with limited liability is sued, then the claimants are suing the company, not its owners or investors. A shareholder in a limited company is not personally liable for any of the debts of the company, other than for the amount already invested in the company. |
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Definition
•A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships.
•S corporations have shareholders, directors, and employees, plus the benefit of limited liability.
•Profits are taxed only as the personal income of the shareholders. |
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Term
| Limited Liability Companies LLC |
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Definition
A company similar to an S Corporation but without the special eligibility requirements.
•Advantages of LLCs:
1.Limited liability
2.Choice of taxation
3.Flexible ownership rules
4.Flexible distribution of profits and losses
Operating flexibility |
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| The result of two firms forming one company |
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One company’s outright purchase of the property and obligations of another company. |
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Types of Mergers
•Vertical merger
•Horizontal merger
•Conglomerate merger |
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Definition
•Vertical merger — The joining of two companies 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. |
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Term
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Definition
is a type of license that a party (franchisee) acquires to allow them to have access to a business's (franchisor) proprietary knowledge, processes, and trademarks in order to allow the party to sell a product or provide a service under the business's name.
In exchange for gaining the franchise, the franchisee usually pays the franchisor an initial start-up and annual licensing fees. |
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