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Unit 3-1
Unit 3-1 Business Organizations (Chapter 8)
Term | Definition |
---|---|
Business Organization | an establishment formed to carry out commercial enterprise. |
Sole Propritorship | a business owned and managed by a single individual |
Liability | the legally bound obligation to pay. It is unlimited for sole proprietorships. |
Fringe Benefit | Payment other than wages or salaries. For example: Health Insurance. |
Partnership | A business owned by two or more persons who agree on division of responsibilities and profits |
General Partnership | partnership in which the partners share equally in responsibility and liability. |
Limited Partnership | Partnership in which only one partner is the general partner |
Limited Liability Partnership | Partnership in which all partners are limited partners |
Corporation | A legal entity owned by individual stockholders |
Closely Held Corporation | issues stock to only a few people, often family members |
Publicly Held Corporation | Sells stock on the open market. |
Certificate of Incorporation | License to form a corporation. Issued by a state government. |
Conglomerate | Merging of at least three businesses that make unrelated products. |
Business Franchise | semi-independent business that pays fees to a parent company in return for the right to sell a product or service in a given area. |
Royalty | share of earnings given as a payment to the parent company |