Chapter 8 Flashcards
Business organization
An establishment formed to carry on commercial enterprise
Sole proprietorship
Business owned and managed by a single individual
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
Business organization owned by two or more
General partnership
Share equally in responsibility and liability
Limited partnership
Only one partner is requires a general partnership
Limited liability partnership (LLP)
All partners are limited partners
Articles of partnership
A partnership agreement
Uniform partnership act (UPA)
Act ordering common ownership interests, profit and loss sharing, and shared management responsibilities in a partnership
Assets
Money and other valuables belonging to an individual or business
Corporation
A legal entity owned by individual stockholders
Stock
Certificate of ownership in a corporation
Closely held corporation
Issues stock to only a few people, often family members
Publicly held corporation
Sells stock on the open market
Bond
Formal contract to repay borrowed money with interest at fixed intervals
Certificate of incorporation
License to form a corporation issued by state government
Dividend
Portion of corporate profits paid out to stockholders
Horizontal merger
Combination of two or more firms competing in the same market with the same good or service
Vertical merger
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 (MNC)
Large corporation that produces and sells its goods and services throughout the world
Business franchise
A semi-independent business that pays fees to a parent company in return for the exclusive right to sell a certain product or service in a given area
Royalty
Share of earnings given as payment
Cooperative
Business organization owned and operated by a group of individuals for their mutual benefits
Consumer cooperative
Retail outlet owned and operated by consumers
Service cooperative
Provides a service, rather than a good
Producer cooperative
Agricultural marketing cooperative that helps members sell their products
Nonprofit organization
Institution that functions much like a business, but does not operate for the purpose of generating profits
Professional organization
Nonprofit, works to improve the image, working conditions, and skill level of people in particular occupations
Business association
Nonprofit organization that promotes collective business interests for a city, state, or other geographical area
Trade association
Nonprofit, that promotes the interests of a particular industry
