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52 True/False questions

  1. Types of Corporationsparticipates in business in the state in which it is chartered

          

  2. White KnightA more acceptable firm that is willing to acquire a threatened company

          

  3. AcquisitionWhen one company purchases another by buying most of its stock

          

  4. General Partnershipa partnership that involves a complete sharing in the management of a business

          

  5. Board of Directorselected by the stockholders to oversee the general operation of the corporation and set the long-range objectives of the corporation.
    - hire corporate officers

          

  6. Cooperative (Co-Op)a legal document that the state issues after filing the articles of incorporation

          

  7. Common StockOwned by people who have voting rights in the corporation, but do not receive payment until after preferred stockholders are paid.
    - one vote per share
    - receive first dibs at preemptive right

          

  8. Conglomerate MergerFirms in unrelated industries merge

          

  9. LLCLeveraged Buyout; a group of investors borrows money from banks and other institutions to acquire a company, using the assets of the purchased company to repay the loan.

          

  10. Partnershipan association of two or more persons who carry on as co-owners of a business for profit

          

  11. Advantages of Sole Proprietorships- Unlimited Liability
    - Limited Sources of Funds
    - Higher Interest Rates on loans
    - Limited Skills
    - Business usually doesn't continue if the owner dies or stops working
    - Lack of Qualified Employees
    - High Marginal Tax Rate

          

  12. Vertical MergerFirms that operate at different but related levels of an industry merge

          

  13. Public Corporationa corporation in which anyone may buy, sell, or trade stock, that must disclose financial information to the public

          

  14. Horizontal MergerFirms that operate at different but related levels of an industry merge

          

  15. Articles of Incorporation- Limited Liability
    - Ease of Transfer and Ownership
    - Corporations do not die if an owner leaves
    - External Sources of Funds
    - Most potential to expand

          

  16. Poison Pilla legal entity, created by the state, whose assets and liabilities are separate from its owners
    - may be privately owned or publically owned by stockholders
    - profits paid in cash payments called dividends

          

  17. Types of Partnershiplegal documents that set forth the basic agreement between partners.

          

  18. Joint VenturePartnership established for a specific project or for a limited time

          

  19. IPOInitial Public Offering; a corporation that becomes public by selling stock for the first time

    (opposite: privatization)

          

  20. Advantages of a Corporation- Double Taxation
    - Expensive to Form
    - Must Disclose Information to many people
    - many employees are not stockholders

          

  21. Disadvantages of a Partnership- Ease of Organization
    - Availability of Capital and Credit
    - Combined Knowledge and Skills
    - Quicker Decision-Making
    - Fewer Regulatory Controls

          

  22. Limited PartnerDo not participate in the management of the business but share in the profits in accordance with the terms of a partnership agreement

          

  23. Preemptive Right:A more acceptable firm that is willing to acquire a threatened company

          

  24. Limited PartnershipDo not participate in the management of the business but share in the profits in accordance with the terms of a partnership agreement

          

  25. What is the difference between an inside director and an outside director?- Name, Purpose, Location
    - Expected Life of the Corporation
    - Classes of stock & number of shares
    - Names and addresses of the initial board of directors/ incorporators
    - Salaries of each partner
    - Division of profits and losses
    - Restrictions

          

  26. Preferred StockOwned by people who have voting rights in the corporation, but do not receive payment until after preferred stockholders are paid.
    - one vote per share
    - receive first dibs at preemptive right

          

  27. Shark repellantA more acceptable firm that is willing to acquire a threatened company

          

  28. Quasi-Taxable Organizationowned and operated by the federal, state, or local government (ex: NASA)

          

  29. Disadvantages of Sole Proprietorships- Unlimited Liability
    - Limited Sources of Funds
    - Higher Interest Rates on loans
    - Limited Skills
    - Business usually doesn't continue if the owner dies or stops working
    - Lack of Qualified Employees
    - High Marginal Tax Rate

          

  30. Sole Proprietorship1. General Partnership
    2. Limited Partnership

          

  31. Private Corporationparticipates in business outside the nation in which it incorporated

          

  32. Foreign Corporationparticipates in business outside the nation in which it incorporated

          

  33. Domestic Corporationparticipates in business outside of the state in which it is chartered

          

  34. Alien Corporationparticipates in business outside the nation in which it incorporated

          

  35. Types of stock issued by corporationsDomestic, Foreign, Alien, Private, Public, Quasi-Public, Nonprofit

          

  36. Who accepts the loss in a limited partnership if the business fails?the general partner.

          

  37. Types of AcquistionCorporate Raider, Poison Pill, Shark Repellent, White Knight

          

  38. MergerLimited Liability Company; a form of business ownership that provides limited liability, as in a corporation, but is taxed like a partnership.

          

  39. What does an article of partnership contain?- Name, Purpose, Location
    - Expected Life of the Corporation
    - Classes of stock & number of shares
    - Names and addresses of the initial board of directors/ incorporators
    - Salaries of each partner
    - Division of profits and losses
    - Restrictions

          

  40. LBOLeveraged Buyout; a group of investors borrows money from banks and other institutions to acquire a company, using the assets of the purchased company to repay the loan.

          

  41. Types of MergersHorizontal, Vertical, Conglomerate

          

  42. Quasi-Public Corporationa corporation in which anyone may buy, sell, or trade stock, that must disclose financial information to the public

          

  43. CorporationCorporation taxed as if it were a partnership with restrictions on shareholders

          

  44. Articles of Partnershiplegal documents that set forth the basic agreement between partners.

          

  45. Advantages of a Partnership- Unlimited Liability
    - All partners are responsible for the business actions of other partners
    - Partnership dissolves if one partner leaves
    - Profit must be evenly distributed
    - Limited Source of Funds

          

  46. "There are more ________ than _______, but _______ make more profit than ________.""There are more sole proprietorships than corporations, but corporations make more profit than sole proprietorships."

          

  47. Disadvantages of a Corporation- Limited Liability
    - Ease of Transfer and Ownership
    - Corporations do not die if an owner leaves
    - External Sources of Funds
    - Most potential to expand

          

  48. Corporate Raidera company or individual that wants to acquire or take over another company and first offers to buy some or all its stock at a premium in a tender offer

          

  49. S-Corporationa legal entity, created by the state, whose assets and liabilities are separate from its owners
    - may be privately owned or publically owned by stockholders
    - profits paid in cash payments called dividends

          

  50. incorporatorsCorporation taxed as if it were a partnership with restrictions on shareholders

          

  51. Corporate Chartera legal document that the state issues after filing the articles of incorporation

          

  52. What does an article of incorporation contain?legal documents filed by incorporators in a state that set forth the basic agreement in a corporation