Intro to Business Management. Midterm study guide-Chapter 5

liquidity
The level of ease with which an asset can be converted to cash
merger
A form of business combination in which two companies combine forces to create a new single entity
hostile takeovers
Situations in which an outside party buys enough shares in a corporation to take control against the wishes of the board of directors and corporate officers
public corporation
A corporation that actively sells shares on the open market
limited liability partnership
A partnership where all of the partners are limited partners and have limited liability
acquisition
A form of business combination in which one company buys another company’s voting shares
leveraged buyout (LBO)
A situation in which individuals or a group of investors purchase a company primarily with debt secured by the company’s assets
general partnership
A partnership in which all partners have the right to participate as co-owners and all are liable for the business’s debts
corporation
A legally chartered enterprise having most of the legal rights of a person, including the right to conduct business, to own and sell property, to borrow money, and to sue or be sued; owners of the corporation enjoy limited liability
shareholders
Proportionate owners of a corporation; based on the number of shares held
stock certificate
A document that proves stock ownership common shares. Shares whose owners have voting rights and have the last claim on distributed profits and assets
board of directors
A group of people, elected by the shareholders, who have the ultimate authority in guiding the affairs of a corporation
private corporation
A company owned by private individuals or companies
sole proprietorship
A business owned by a single individual
preferred shares
Shares that give their owners first claim on a company’s dividends (before common shareholders) and assets if the company goes out of business (after all debts have been paid)
limited partnership
A partnership composed of one or more general partners and one or more partners whose liability is limited to the amount of their capital investment
parent company
A company that owns most, if not all, of another company’s shares and takes an active part in managing that company
chief executive officer (CEO)
The person appointed by a corporation’s board of directors to carry out the board’s policies and supervise the activities of the corporation
dividends
Distributions of corporate assets to shareholders in the form of cash or other assets
unlimited liability
The legal condition under which any damages or debts attributable to the business can also be attached to the owner because the two have no separate legal existence
proxy
A document authorizing another person to vote on behalf of a shareholder in a corporation
partnership
An unincorporated business owned and operated by two or more people under a voluntary legal association
common shares
Shares whose owners have voting rights and have the last claim on distributed profits and assets
subsidiary corporations
Corporations whose shares are owned entirely or almost entirely by another corporation