1.2 Characteristics of a Business Flashcards

1
Q

Sole Proprietorship

A

A business that is owned by one individual

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2
Q

Partnerships

A

Two or more individuals own a business and share responibilities. Owners may be active or silent. A Silent partner invests money in the business but does not take part in its day to day activities.

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3
Q

Corporations

A

The corporation is created as an “artificial” person with rights, powers and duties. Owners are called shareholders (they buy shares in the business – this money is used to expand the business). They also elect a board of directors who will run the corporations. Shareholders receive dividends which would be part of the profits made by the corporation.

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4
Q

Cooperatives

A

A cooperative is an organization that is owned and operated for the benefit of its members. A government charter allows co-ops to exists. Each member gets a singular vote - regardless of shares owned. Dividends are paid out to members. An example of a co-op would be the credit union.

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5
Q

Franchise

A

An individual or group of individuals but the right to operate and sell certain goods or services. Examples include dairy queen, pizza hut, Midas muffler.the person buying the franchise - the franchisee - agrees to follow all standards established by the franchisor - the owner of the organization.

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6
Q

Business Enterprise: Service

A

A company which provides a service rather than a good/product to the consumer. Example: a law firm or travel agency

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7
Q

Business Enterprise: Merchandising

A

A company which buys finished products and resells them to individuals or other businesses. Example: Sears

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8
Q

Business Enterprise: Manufacturing

A

A company which buys raw material and transforms the raw material into a finished product. Example: Clayburn Brick Plant - manufacturing

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9
Q

Non-Profit

A

An organization whose activities meet social needs and are not profit based. Example: Rotary Club

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