ENT 3003 EXAM 4 STUDY GUIDE QUESTIONS WITH
COMPLETE SOLUTIONS
debt financing -- Answer ✔✔ borrowing money to start a business that is expected to e
paid back with interest at a designated point in the future
due diligence -- Answer ✔✔ a rigorous process that involves evaluating an investment
opportunity prior to the contract being signed
initial public offering (IPO) -- Answer ✔✔ a companys first opportunity to sell stocks on
the stock market to be purchased by members of the general public
sole proprietorship -- Answer ✔✔ a business owned by one person who has full
exposure to its liabilities
C corporation -- Answer ✔✔ a separate legal and taxable entity created by state
government and owned by an unlimited number of shareholders
general partnership -- Answer ✔✔ a business owned by two or more people who have
made a decision to comanage and share in the profits and losses
, limited liability corporation (LLC) -- Answer ✔✔ a business structure that combines the
taxation advantages of a partnership with the limited liability benefits of a corporation
without being subject to the eligibility requirements of an S-corp
S corporation -- Answer ✔✔ a type of corporation that is eligible for, and elects, special
taxation status
what is the key benefit of a c corporation? -- Answer ✔✔ limited liability for the debts
of the business
what is the key drawback of a C corporation? -- Answer ✔✔ double taxation of
dividends
true or false: if properly organized, the owners of a LLC enjoy both limited liability and
pass through taxation -- Answer ✔✔ true
founders agreement -- Answer ✔✔ a clear agreement between founders on a number
of key issues that their business might face
not-for-profit -- Answer ✔✔ a tax status granted to companies performing functions
deemed by congress to be socially desirable that exempts them from income tax and, in
some cases, allows them to receive tax-deductible donations
intellectual property (IP) -- Answer ✔✔ intangible personal property created by human
intelligence, such as ideas, inventions, slogans, logos, and processes
COMPLETE SOLUTIONS
debt financing -- Answer ✔✔ borrowing money to start a business that is expected to e
paid back with interest at a designated point in the future
due diligence -- Answer ✔✔ a rigorous process that involves evaluating an investment
opportunity prior to the contract being signed
initial public offering (IPO) -- Answer ✔✔ a companys first opportunity to sell stocks on
the stock market to be purchased by members of the general public
sole proprietorship -- Answer ✔✔ a business owned by one person who has full
exposure to its liabilities
C corporation -- Answer ✔✔ a separate legal and taxable entity created by state
government and owned by an unlimited number of shareholders
general partnership -- Answer ✔✔ a business owned by two or more people who have
made a decision to comanage and share in the profits and losses
, limited liability corporation (LLC) -- Answer ✔✔ a business structure that combines the
taxation advantages of a partnership with the limited liability benefits of a corporation
without being subject to the eligibility requirements of an S-corp
S corporation -- Answer ✔✔ a type of corporation that is eligible for, and elects, special
taxation status
what is the key benefit of a c corporation? -- Answer ✔✔ limited liability for the debts
of the business
what is the key drawback of a C corporation? -- Answer ✔✔ double taxation of
dividends
true or false: if properly organized, the owners of a LLC enjoy both limited liability and
pass through taxation -- Answer ✔✔ true
founders agreement -- Answer ✔✔ a clear agreement between founders on a number
of key issues that their business might face
not-for-profit -- Answer ✔✔ a tax status granted to companies performing functions
deemed by congress to be socially desirable that exempts them from income tax and, in
some cases, allows them to receive tax-deductible donations
intellectual property (IP) -- Answer ✔✔ intangible personal property created by human
intelligence, such as ideas, inventions, slogans, logos, and processes
