Future Business Leaders of America (FBLA) Business Law Practice Exam

What term describes a corporation that owns many different types of companies?

1. Conglomerate

2. Merger

3. Subsidiary

4. Partnership

The correct answer is: Conglomerate

A corporation that owns many different types of companies is referred to as a conglomerate. This term is commonly used in the business world to describe a large corporation that consists of several different companies operating in various industries, often with diversified business interests. Conglomerates are known for their ability to spread risk across different sectors and capitalize on multiple markets, which can provide stability and growth opportunities. In contrast, a merger refers to the combination of two companies into one, but it does not necessarily imply that the resulting company will own diverse types of businesses. A subsidiary is a company that is controlled by another, larger company (the parent company), but it typically operates within the same industry or sector as its parent. A partnership is a business arrangement in which two or more individuals or entities manage and operate a business together, which does not capture the essence of owning diverse companies like a conglomerate does.