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