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27 terms

Introduction to Business - Chapter 5

STUDY
PLAY
small business
independent business with fewer than 500 employees, not dominant in its market
home-based business
firm operated from residence of the business owner
business plan
written document that provides an orderly statement of a company's goals, methods, and standards
Small Business Administration
principal government agency concerned with helping small U.S. firms
microloans
small-business based loans often used to buy equipment or operate a business
business incubator
local programs designed to provide low-cost shared business facilities to small start-up ventures
venture capital
money invested in a business by another business firm or group of individuals in exchange for an ownership share
franchising
contractual business arrangement between a manufacturer or other supplier, and a dealer such as a restaurant or retailer
franchisee
individual or business firm purchasing a franchise
franchisor
firm whose products are sold to customers by the franchisee
sole proprietorship
business ownership in which there is no legal disitinction between the sole proprietor's status as an individual and his or her status as a business owner
partnership
association of two or more persons who operate a business as co-owners by voluntary legal agreement
corporation
legal organization with assets and liabilities separate from those of its owner(s)
S corporation
corporations that do not pay corporate taxes on profits; instead, profits are distributed to shareholders, who pay individual income taxes
limited-liability corporation
corporation that secures the corporate advantage of limited liability while avoiding the double taxation characteristic of a traditional corporation
employee ownership
business ownership in which workers buy shares of stock in the company that employs them
not-for-profit corporation
organization whose goals do not include pursuing a profit
stockholders
owners of a corporation due to their purchase of stock in the corporation
preferred stock
shares that give owners limited voting rights, and the right to receive dividends or assets before owners of common stock
common stock
shares that give owners voting rights but only residual claims to the firm's assets and income distributions
board of directors
governing body of a corporation
merger
agreement in which two or more firms combine to form one company
acquisition
agreement in which one firm purchases another
vertical merger
merger that combines firms operating at different levels in he production and marketing process
horizontal merger
merger that joins firms in the same industry for the purpose of diversification, increasing customer bases, cutting costs, or expanding product lines
conglomerate merger
merger that combines unrelated firms, usually with the goal of diversification, spurring sales growth, or spending a cash surplus in order to avoid a takeover attempt
joint venture
partnership between companies formed for a specific undertaking