Ch-8 Flashcards
Sole Proprietorship
A business owned and managed by a single individual
Business Organization
An establishment formed to carry on commercial enterprise
Business License
Authorization to start a business issued by the local government
Zoning Law
Law in a city or town that designates separate areas for residency and for business
Liability
The legally bound obligation to pay debts
Fringe Benefit
Payment other than wages or salaries
Partnership
A business organization owned by two or more persons who agree on a specific division of responsibilities and profits
General Partnership
Partnership in which partners share equally in both responsibility and liability
Limited Partnership
Partnership in which only one partner is required to be a general partner
Limited Liability Partnership
Partnership in which all partners are limited partners
Assets
Money and other valuables belonging to an individual or business
Corporation
A legal entity owned by individual stockholders
Stock
A certificate of ownership in a corporation
Bond
A formal contract to repay borrowed money with interest at fixed intervals
Certificate of Incorporation
License to form a corporation issued by state government
Dividend
The portion of corporate profits paid out to stockholders
Horizontal Merger
The combination of two or more firms competing in the same market with the same good or service
Vertical Merger
The combination of two or more firms involved in different stages of producing the same good or service
Conglomerate
Business combination merging more than three businesses that make unrelated products
Multinational Corporation
Large corporation that produces and sells its goods and services throughout the world
Royalty
Share of earnings given as payment
Cooperative
A business organization owned and operated by a group of individuals for their mutual benefit
Nonprofit Organization
Institution that functions much like a business, but does not operate for the purpose of generating profits
Trade Association
Nonprofit organization that promotes the interests of a particular industry
