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adownload_doc-2.php - Business X-100 Exam 3 Study Guide...

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Business X-100 Exam 3 Study Guide Chapter 5: Options for Organizing Business I. Vocabulary a. Acquisition - the purchase of one company by another, usually by buying its stock b. Articles of Partnership - legal documents that set forth the basic agreement between partners c. Board of Directors - a group of individuals elected by the stockholders to oversee the general operation of the corporation, who set the corporation’s long-range objectives d. Common Stock - stock whose owners have voting rights in the corporation, yet do not receive preferential treatment regarding dividends e. Co-op - organization composed of individuals or small businesses that have blended together to reap the benefits of belonging to a larger organization f. Corporate Charter - a legal document that the state issues to a company based on information the company provides in the articles of incorporation g. Corporation - a legal entity, created by the state, whose assets and liabilities are separate from its owners h. Dividends - profits of a corporation that are distributed in the form of cash payments to stockholders i. General Partnership - partnership that involves a complete sharing in both the management and the liability of the business j. Initial Public Offering (IPO) - selling a corporation’s stock on public markets for the first time k. Joint Venture - partnership established for a specific project or for a limited time l. Leveraged Buyout (LBO) - purchase in which a group of investors borrows money from banks and other institutions to acquire a company (or a division of one), using the assets of the purchased company to guarantee repayment of the loan m. Limited Liability Company (LLC) - form of ownership that provides limited liability and taxation like a partnership but places fewer restrictions on members n. Limited Partnership - business organization that has at least one general partner, who assumes unlimited liability, and at least one limited partner, whose liability is limited to her or his investment in the business o. Merger - the combination of two companies (usually corporations) to a form a new company
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p. Nonprofit Corporations - corporations that focus on providing a service rather than earning a profit but are not owned by a government entity q. Partnership - a form of business organization defined by the Uniform Partnership Act as “an association of two or more persons who carry on as co-owners of a business for profit” r. Preferred Stock - a special type of stock whose owners, though not generally having a say in running the company, have a claim to profits before other stockholders do s. Private Corporation - corporation owned by just one or a few people who are closely involved in managing the business t. Public Corporation - corporation whose stock anyone may buy, sell, or trade u. Quasi-Public Corporations - corporations owned and operated by the federal, state, or local government v. S Corporation - corporations taxed as though it were a partnership with restrictions on shareholders w. Sole Proprietorships
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