1. Corporations: Stockholders –People who own stock of the corporation Stock/Share –Represents a portion of ownership; anyone who owns stock of a corporation is therefore a part owner of that corporation 20% of US businesses are corporations, which are responsible for up to 90% of all goods sold in the nation and generate about 70% of net national income earned Closely Held vs Publicly held –Privately held corporations which stock is only available to a close net of people (family); stock is not sold on the open market –Publicly traded stock available to all interested in investing with the corporation; stock can be bought and sold on the open market Bond –Certificate issued by a corporation of promise to repay with interest amount borrowed from investor Dividends –Portion of corporate profits paid out to stockholders

2. Mergers and Acquisitions: Corporate growth based on –Vertical Integration –Horizontal Integration

3. What are the main business structures utilized in the US? Sole Proprietorship –Business owned and managed by a single individual Partnerships –Business organization owned by two or more persons with specific divisions as to responsibilities and profit Corporations –A legal entity owned by individual stockholders who share limited liability for firm’s debts Franchises –A semi-independent business that pays fees to a parent company in exchange for exclusive right to sell a certain product Cooperatives –Business organization owned and operated by a group of individuals for their shared benefit Nonprofit –Businesses that aim to benefit the society

4. Responsibility vs Liability Responsibility –refers to the actions and tasks of doing what has to be done to operate the business Liability –refers to the legal accountability one may face for product/service, which may result in monetary fines or criminal charges

5. Sole Proprietorship 75% of all businesses in US are sole proprietorships the oldest, most common, and simplest form of business organization can be organized very informally, is not subject to much federal or state regulation, and is relatively simple to manage and control owner is inseparable from the business and is financially and legally responsible for all debts and legal actions against the business

6. Partnerships General Partnership –Most common –Partners share equal responsibility and liability –Exp: doctors, lawyers, accountants Limited Partnership (LP) –One partner is required to be a general partner with unlimited personal liability –Remaining partners contribute finances Limited liability Partnership (LLP) –Responsibilities and liability is shared among partners