Chapter 8 Vocab
Business organizaton
the ownership structure of a company or firm
Sole proprietorship
a business that one person (an entrepreneur) owns
Business license
written permission given by the local government that allows a business to open
Zoning laws
law that does not allow people to operate a business in certain areas
Unlimited personal liability
when the owner of a business is responsible for paying all the money the business owes
Liable
having legal responsibility
Limited capital
the limit of the amount of money to grow a business
Fringe benefits
anything extra given to workers in addition to their wages,such as paid vacations, retirement plans, and medical insurance
Partnership
a business that two or more people own
General partnership
a partnership in which partners share equally in both responsibility and liabilty
Limited partenership
a partnership in which only one partner is required to have both responsibility and liability
Limited liability partnership
a partnership in which all partners are limited partners
Articles of partnership
a partnership agreement; lists each partner’s rights and responsibilities and how the partner will share profits or losses
Asset
the money and valuables belonging to an individual or business
Business franchise
a business pays fees to a parent company for the right to sell a product or service
Royalty
Share of earnings given as payment to the owner of a patent or copyright
Corporation
a business that can be made up of many owners; the law allows it to act like a single person
Charter
an official document issued by state governments that gives the right to create a corportation
Share
a unit of stock in a company
Stock
a certificate that signifies ownership of a corporation
Closely held corporation
a corporation that gives stock to only a few people, often members of the same family
Publicly held corporation
a corporation that sells stock on the open market
Limited liabilty
when investors can lose only the money they invested
Bond
a type of loan an investor buys from a company or the government; the seller promises to pay back the investor’s money plus a profit later
Certificate of incorporation
a license to form a corporation issued by the state government
Dividend
the investor’s share of a company’s profit
Capital gain
the difference between selling price and purchase price; it results in a financial gain for the seller
Limited liability corporation
a type of business with limited liability of the owners; it does not pay corporate income tax
Horizontal mergers
when a business buys another business that produces the same goods and services
Vertical mergers
the combination of businesses involved in the different stages in producing the same goods and services
Conglomerate
the business combination that brings together more than three businesses that make or provide unrelated goods and services
Multinational corporation
a large corporation that operates in more than one country
Cooperative
a business organization owned and operated by a group of individuals for their mutual benefit
Consumer cooperative
a retail outlet owned and operated by consumers that sells merchandise to members at reduced prices
Service cooperative
a type of cooperative that provides a service rather than a good
Producer cooperative
an agricultural marketing cooperative that helps members sell their products
Nonprofit organization
an institution that functions much like a business but does not operate for the purpose of generating profit
Philanthropy
an activity or organization whose purpose is to improve on the social or economic welfare of humanity
Professional organization
a nonprofit organization that works to the image, working conditions, and skill levels of people in particular occupations
Business association
a group organized to promote the collective business interests of an area or group of similar businesses
Trade associations
a nonprofit organization that promotes the interest of a particular industry
Labor unions
an organization of workers that tries to improve working conditions, wages, and benefits for its members
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