COB 318 FINAL EXAM VERIFIED STUDY GUIDE
entrepreneur - Answers - One who initiates and assumes the financial risk of a new
business enterprise and undertakes to provide or control its management.
sole proprietorship - Answers - The simplest form of business, in which the owner is
the business. The owner reports business income on his or her personal income tax
return and is legally responsible for all debts and obligations incurred by the business.
franchisee - Answers - One receiving a license to use another's trademark, trade
name, or copyright in the sale of goods and services.
franchise - Answers - Any arrangement in which the owner of a trademark, trade
name, or copyright licenses another to use that trademark, trade name, or copyright in
the selling of goods or services.
articles of partnership - Answers - A written agreement that sets forth each partner's
rights and obligations with respect to the partnership.
franchisor - Answers - One licensing another to use the owner's trademark, trade
name, or copyright in the selling of goods or services.
Joint and several liability - Answers - A doctrine under which a plaintiff can sue, and
collect a judgment from, all of the partners together (jointly) or one or more partners
separately (severally).
partnership - Answers - An agreement by two or more persons to carry on, as co-
owners, a business for profit.
Dissociation - Answers - The severance of the relationship between a partner and a
partnership.
fiduciary relationship - Answers - A relationship founded on trust and confidence.
limited partnership (LP) - Answers - A partnership consisting of one or more general
partners and one or more limited partners.
general partner - Answers - A partner who assumes responsibility for the management
of the partnership and liability for its debts.
limited liability partnership (LLP) - Answers - A form of partnership that allows
professionals to enjoy tax benefits of a partnership while limiting their personal liability
for the malpractice of other partners.
, limited partner - Answers - A partner who contributes capital but has no right to
participate in the management or operation of the partnership and is not personally
liable for partnership debts beyond the capital contributed.
limited liability company (LLC) - Answers - A hybrid form of business enterprise that
offers the limited liability of the corporation but the tax advantages of a partnership.
corporation - Answers - A legal entity formed in compliance with statutory requirements
that is distinct from its shareholder-owners.
operating agreement - Answers - In a limited liability company, an agreement in which
the members set forth the details of how the business will be managed and operated.
articles of organization - Answers - The document filed with a designated state official
by which a limited liability company is formed.
S corporation - Answers - A business corporation that qualifies for special income tax
treatment.
dividends - Answers - A distribution to corporate shareholders of corporate profits or
income, disbursed in proportion to the number of shares held.
retained earnings - Answers - The portion of a corporation's profits that has not been
paid out as dividends to shareholders.
domestic corporation - Answers - In a given state, a corporation that does business in,
and is organized under the law of, that state.
alien corporation - Answers - A designation in the United States for a corporation
formed in another country but doing business in the United States.
close corporation - Answers - A corporation whose shareholders are limited to a small
group of persons, often only family members. In a close corporation, the shareholders'
rights to transfer shares to others are usually restricted.
foreign corporation - Answers - In a given state, a corporation that does business in
the state without being incorporated therein.
articles of incorporation - Answers - The document containing basic information about
the corporation that is filed with the appropriate governmental agency, usually the
secretary of state, when a business is incorporated.
bylaws - Answers - The internal rules of management adopted by a corporation or
other association
entrepreneur - Answers - One who initiates and assumes the financial risk of a new
business enterprise and undertakes to provide or control its management.
sole proprietorship - Answers - The simplest form of business, in which the owner is
the business. The owner reports business income on his or her personal income tax
return and is legally responsible for all debts and obligations incurred by the business.
franchisee - Answers - One receiving a license to use another's trademark, trade
name, or copyright in the sale of goods and services.
franchise - Answers - Any arrangement in which the owner of a trademark, trade
name, or copyright licenses another to use that trademark, trade name, or copyright in
the selling of goods or services.
articles of partnership - Answers - A written agreement that sets forth each partner's
rights and obligations with respect to the partnership.
franchisor - Answers - One licensing another to use the owner's trademark, trade
name, or copyright in the selling of goods or services.
Joint and several liability - Answers - A doctrine under which a plaintiff can sue, and
collect a judgment from, all of the partners together (jointly) or one or more partners
separately (severally).
partnership - Answers - An agreement by two or more persons to carry on, as co-
owners, a business for profit.
Dissociation - Answers - The severance of the relationship between a partner and a
partnership.
fiduciary relationship - Answers - A relationship founded on trust and confidence.
limited partnership (LP) - Answers - A partnership consisting of one or more general
partners and one or more limited partners.
general partner - Answers - A partner who assumes responsibility for the management
of the partnership and liability for its debts.
limited liability partnership (LLP) - Answers - A form of partnership that allows
professionals to enjoy tax benefits of a partnership while limiting their personal liability
for the malpractice of other partners.
, limited partner - Answers - A partner who contributes capital but has no right to
participate in the management or operation of the partnership and is not personally
liable for partnership debts beyond the capital contributed.
limited liability company (LLC) - Answers - A hybrid form of business enterprise that
offers the limited liability of the corporation but the tax advantages of a partnership.
corporation - Answers - A legal entity formed in compliance with statutory requirements
that is distinct from its shareholder-owners.
operating agreement - Answers - In a limited liability company, an agreement in which
the members set forth the details of how the business will be managed and operated.
articles of organization - Answers - The document filed with a designated state official
by which a limited liability company is formed.
S corporation - Answers - A business corporation that qualifies for special income tax
treatment.
dividends - Answers - A distribution to corporate shareholders of corporate profits or
income, disbursed in proportion to the number of shares held.
retained earnings - Answers - The portion of a corporation's profits that has not been
paid out as dividends to shareholders.
domestic corporation - Answers - In a given state, a corporation that does business in,
and is organized under the law of, that state.
alien corporation - Answers - A designation in the United States for a corporation
formed in another country but doing business in the United States.
close corporation - Answers - A corporation whose shareholders are limited to a small
group of persons, often only family members. In a close corporation, the shareholders'
rights to transfer shares to others are usually restricted.
foreign corporation - Answers - In a given state, a corporation that does business in
the state without being incorporated therein.
articles of incorporation - Answers - The document containing basic information about
the corporation that is filed with the appropriate governmental agency, usually the
secretary of state, when a business is incorporated.
bylaws - Answers - The internal rules of management adopted by a corporation or
other association
