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Foundations Ch. 6

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partnership
a voluntary agreement under which two or more people act as co-owners of a business for profit
general-partnership
a partnership in which all partners can take an active role in managing the business and have unlimited liability for any claims against the firm
limited liability partnership (LLP)
form of a partnership in which all partners have the right to participate in management and have limited liability for company use
general corporation (C corporation)
most common type of corporation, stockholders take on limited liability
articles of incorporation
document filed with the state government to establish the existence of a new corporation
corporate bylaws
the basic rules governing how a corporation is organized and how it conducts its business
institutional investor
an organization that pools contributions from investors, clients, or depositors and uses these funds to buy stocks and other securities
S corporation
avoids double taxation by having its income taxed as if it were a partnership
statutory close corporation
limited number of owners that files special articles of incorporation allowing it to operate under simpler, less formal rules than a general corporation
acquisition
a corporation restructuring in which one firm buys another
merger
two businesses combine into one
horizontal merger
merger in the same industry
vertical merger
merger of firms in different stages of the production cycle
conglomerate merger
merger in unrelated industries
limited liability company (LLC)
limited liability of corporation, taxed as a partnership
business format franchise
a broad franchise agreement in which the franchisee pays for the right to use the name, trademark, and business production methods of the franchisor