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Bad 10 Ch 5
| Question | Answer |
|---|---|
| Acquisition | The purchase of one company by another usually by buying its stock. |
| Horizontal Merger | When firms that make and sell similar products to the same customers merge. |
| Conglomerate Merger | When two firms of unrelated industries merge. |
| Corporate Raider | a company or individual wants to take over another company. |
| Tender offer | When a corporate Raider offers to buy stock at a premium price. |
| A Poison Pill | Taking on debt to scare a Corporate Raider. |
| Shark Repellent | When management requires a large majority of stock holders to approve a take over. |
| White Knight | A more acceptable firm that is willing to acquire the threatened company. |
| Articles of Partnership | Legal documentation that sets forth the basic agreement between partners. |
| 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 of objectives. |
| Who is legally liable for the mismanagement or misuse of funds of a firm? | The board of directors. |
| Who hires corporate officers? | The Board of Directors. |
| Inside Directors | Employees of the company. |
| Outside Directors | Top executives from other companies. |
| Qualified board members are ____ | Shrinking supply. |
| Common Stock | stock whose owners have voting rights in the corporation yet do not receive preferential treatment regarding dividends. |
| What are the two types of corporation stock? | Common and preferred. |
| Who elects the Board of Directors | Common Stockholders |
| Where do stockholders elect the Board of Directors? | The annual stockholders meeting. |
| Which type of stock holders have a say in how the company is run? | Common stockholders. |
| Proxy | written authorization by the stockholders assigning their voting privileged to someone else. |
| Preemptive right | When a corporation decides to sell more common stock the right of stakeholder to be first to purchase it. |
| What type of corporation has limited liability for it's owners? | A Corporation. |
| Public Corporations must file reports with | The Securities Exchange Comission. |
| SEC | Securities Exchange Comission. |
| ESOPs | Employee Stock Ownership Plans. |
| Cooperative or Co-Op | An organization composed of individuals or small businesses that have branded together to reap the benefit of belonging to a larger organization. |
| What type of business represents half of all corporate filings? | S Corporations. |
| S Corporations are popular with what kind of business person? | Entrepreneurs. |
| What are the advantages of an S Corporation? | Simple method of taxation, limited liability of shareholders, perpetual life and the ability to shift income and appreciation to others. |
| What are the disadvantages of an S Corporation? | restrictions on the number and types (individuals, estates and certain trusts of shareholders and the difficulty of formation and operation. |
| How many shareholders can an S corporation have? | 75. |
| Where do most Co-Ops exist? | small farming communities. |
| How do Co-Ops benefit it's members? | Saves money. |
| Corporate Charter | A legal document that states issues to a company based on information the company provides in the Articles of Incorporation. |
| Corporation | A legal entity created by the state whose assets and liabilities are separate from the owners. |
| Dividends | Profits of a corporation that are distributed in the form of cash payments to stockholders. |
| General Partnership | A partnership that involves a complete sharing in both the management and the liability of the business. |
| Initial Public Offering | Selling a corporation's stock on public markets for the first time. |
| IPO | Initial Public offering |
| Joint Venture | A partnership established for a specific project or for a limited time. |
| Leveraged Buyout | A purchase in which a group of investors borrows money from banks and other institutions to acquire a company (or division of one) using the assets of the purchased company to guarantee repayment of the loan. |
| LBO | Leveraged Buyout. |
| Merger Mania | Coined in the 1980s and 1990s because of the explosion of mergers, acquisitions and leveraged buyouts. |
| Limited Liability Company | forms of ownership that provides limited liability and taxation like a partnership but places fewer restrictions on members. |
| LLC | Limited Liability Company. |
| Limited Partnership | A business organization that has at least one general partner who assumes unlimited liability and at least one limited partner whose liability is limited to his or her investment in the business. |
| Limited Partners exist when? | The risk of loss is great. |
| Limited Partners share in the profits. | True |
| What major disadvantage do limited partners have? | They have no voice in the company. |
| What is a major risk of being a general partner? | Unlimited Liability. |
| What type of business is quasi-taxable? | A Partnership. |
| What information does the IRS collect from Partnerships? | Profitability. |
| How is a Partnership taxed? | As individual income. |
| Stock Holders are entitled to what? | Profits of the company after all other obligations have been paid. |
| Incorporators | Individuals creating a corporation. |
| Articles of Incorporation are | Legal Documents |
| The 10 Items in the Model Business Act | Name + @ of corp, Obj of corp $ typ + # of share 4 each 2 B issued, exp life, Fin cap req @ the time of Ncorp, Provis for trans of shares, Prov for reg of IA corp, @ of the bus off reg + state of Ncorp, Name and @ the ini BOD and Names + @ of the Ncorp. |
| Which state office is the Articles of incorporation usually filed with? | Secretary of state. |
| What is the next step for a corporation after securing the articles of incorporation? | Hold an organizational meeting at which the Board of Directors is elected and establish the corporations bylaws. |
| Domestic Corporation | Conducts business in the state it was chartered in. |
| Foreign Corporation | Conducts business in other states than the one it was chartered in. |
| Alien Corporations | Conducts business in other countries than the one it was chartered in. |
| Merger | The Combination of two companies (usually corporations) to form a new company. |
| Partner Capital | money or assets each partner has contributed. |
| Partnerships are less regulated than corporations. | True |
| Partnerships can act quickly. | True. |
| Nonprofit Corporations | |
| Partnership | A form of business organization defined by the Uniformed Partnership Act as "An association of two or more persons who carry in as co-owners of a business for profit" |
| Preferred Stock | A special type of stock whose owners though not generally having a say in the running the company have a claim to profit before other stockholders do. |
| A Corporations has many of the rights and responsibilities of | a person. |
| Corporate owners | Shareholders or stockholders. |
| Who typically owns a corporation? | Many people or organizations. |
| Private Corporation | A corporation owned by just one or a few people who are closely involved in managing the business. |
| Public Corporation | A corporation whose stock anyone may buy sell or trade. |
| What type of corporation does not have to disclose financial information? | Private. |
| What type of corporation must disclose financial information? | Public |
| What are the two types of corporations? | Public and Private. |
| Taking a corporation private helps avoid | a take over by another company. |
| Qausi-Public Corporation | corporations owned and operated by the federal, state or local government. |
| Nonprofit corporations | Corporations that focus on service rather than earning a profit but are not owned by the government. |
| S Corporation | Corporation taxed as though it were a partnership with restrictions on shareholders. |
| What is a Sole Proprietorship? | Businesses owned and operated by one individual; Most common form of business organization in the U.S. |
| What type of business has the most secrecy? | A Sole Proprietorship. |
| What type of business can adapt most quickly? | A Sole Proprietorship. |
| What type of business has the most freedom from government regulation? | A Sole Proprietorship |
| What type of business is most risky to its owners personal property | A Sole Proprietorship |
| How are profits from Sole proprietorship taxed? | As personal income. |
| What type of owner has to pay the highest interest rates from a bank? | A Sole Proprietorship |
| What sources of funds does a Sole Proprietor have? | Friends, Family, Banks, The Small Business Administration, and his or her own funds. |
| The life expectancy of a Sole Proprietorship is directly lined to what? | The owner and his or her ability to work |
| Sole Proprietors have difficulty matching wages and benefits of large corporations. | True. |
| Sole Proprietors have limited room for advancement. | True |
| What difficulties do Sole Proprietors have when trying to attract qualified employees? | Limited room for advancement and matching wages and benefits of corporations. |
| Stock | Shares of a corporation that may be bought or sold. |
| What are three primary forms of business ownership? | Sole Proprietorship, Partnership, Corporations. |
| What type of product does most Sole Proprietorship focus on? | Services |
| How many people does a sole proprietorship usually employ? | Less than 50 |
| What percentage of business in the U.S is made up of Sole Proprietors? | 80 Percent |
| What are the advantages of a Sole Proprietorship? | Ease and Cost of formation, Secrecy, Distribution and Use of profits, Flexibility, Government Regulation and Ease of Closing the Business. |
| What are the disadvantages of a Sole Proprietorship? | Unlimited Liability, Limited Sources of Funds, Limited Skill set, Lack of Continuity and a Lack of qualified employees. |
| Where does the model law governing partnerships come from? | The Uniformed Partnership Act. |
| Partnerships are the least used form of of business. | True |
| What are the Advantages of a partnership | Ease of organization, better credit than a sole proprietor, combined knowledge and skill, Decision Making, and Government Regulatory controls. |
| What are the Disadvantages of a Partnership? | Unlimited liability, Business responsibility, life of the partnership, Distribution of profits, limited sources of funds, taxation of partnerships. |
| What are the advantages of corporation? | Limited Liability, Ease of Transfer of Ownership (stocks), Perpetual Life, External Sources of Funds, and Expansion Potential. |
| What are the disadvantages of a corporation? | Double Taxation, Forming a Corporation (difficulty and cost), Disclosure of information and employee owner separation. |
Created by:
vbrobert
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