BA 101 TEST QUESTIONS AND ANSWERS LATEST UPDATE
Sole Proprietorship
A business owned by one person
Unlimited Liability
The owner is personally and fully responsible for all losses and debts of the business
Partnership
a business owned by two or more people
General Partnership
partnership in which partners share equally in both responsibility and liability
Limited Partnership
A partnership with one or more general partners and one or more limited partners,
where limited partners have liability limited to their investment.
Corporation
A legal entity that separates the owner from the business, offering limited liability.
Corporations are however subject to more regulation and a potential double taxation.
Stock
Shares in a corporation
Dividends
Profits distributed to stockholders from a corporations earnings.
Board of Directors
A group of individuals elected by stockholders to oversee the management of a
corporation.
Limited Liability
Legal protection where a persons liability is limited to a fixed sum.
S Cooperation
A type of cooperation with tax benefits where income is taxed as personal income rather
than corporate income
Limited Liability Company (LLC)
A hybrid organization that combines the benefits of limited liability and pass-through
taxation, similar to a partnership or sole proprietorship.
Merger
A combination of two or more business entities
Acquisition
When one company purchases another
not-for-profit corporation
An organization who's sole purpose is to provide religious, social, or educational
services for no profit.
Leveraged Buyout (LBO)
The acquisition of a company using a significant amount of borrowed money to meet the
cost of acquisition
Franchise
A business model where the franchisor grants a franchise the right to use the business
model and brand for a fee
Cooperative (co-op)
Sole Proprietorship
A business owned by one person
Unlimited Liability
The owner is personally and fully responsible for all losses and debts of the business
Partnership
a business owned by two or more people
General Partnership
partnership in which partners share equally in both responsibility and liability
Limited Partnership
A partnership with one or more general partners and one or more limited partners,
where limited partners have liability limited to their investment.
Corporation
A legal entity that separates the owner from the business, offering limited liability.
Corporations are however subject to more regulation and a potential double taxation.
Stock
Shares in a corporation
Dividends
Profits distributed to stockholders from a corporations earnings.
Board of Directors
A group of individuals elected by stockholders to oversee the management of a
corporation.
Limited Liability
Legal protection where a persons liability is limited to a fixed sum.
S Cooperation
A type of cooperation with tax benefits where income is taxed as personal income rather
than corporate income
Limited Liability Company (LLC)
A hybrid organization that combines the benefits of limited liability and pass-through
taxation, similar to a partnership or sole proprietorship.
Merger
A combination of two or more business entities
Acquisition
When one company purchases another
not-for-profit corporation
An organization who's sole purpose is to provide religious, social, or educational
services for no profit.
Leveraged Buyout (LBO)
The acquisition of a company using a significant amount of borrowed money to meet the
cost of acquisition
Franchise
A business model where the franchisor grants a franchise the right to use the business
model and brand for a fee
Cooperative (co-op)
