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sole proprietorship
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Economics
Ch. 8
| Term | Definition |
|---|---|
| sole proprietorship | business owned and run by a single individual |
| unlimited liability | owner is personally and fully responsible for all losses and debts of a business; applies to proprietorships, and general partnerships |
| inventory | stock of goods held in reserve; includes finished goods waiting to be sold and raw materials to be used in production |
| limited life | situation in which a firm legally ceases to exist when an owner dies or quits, or a new owner is added; applies to sole proprietorships and partnerships |
| partnership | business owned by two or more persons |
| corporation | form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued |
| charter | government document that gives permission to create a corporation |
| stock | ownership certificates in a company |
| stockholders | people who own a share or shares of stock in a corporation |
| dividend | check paid to stockholders, usually quarterly, representing a portion of corporate profits |
| common stock | most basic form of corporate ownership, generally with one vote per share for stockholders |
| preferred stock | form of stock with no voting privileges; has a higher claim on corporate income and assets than does common stock |
| bond | written promise to repay the amount borrowed at a later date |
| interest | payment made for the use of borrowed money; usually paid at periodic intervals for long-term bonds or loans |
| principal | amount borrowed when getting a loan or issuing a bond |
| double taxation | feature of taxation that allows stockholders' dividends to be taxed both as a corporate profit and as a personal income |
| franchise | business investment that involves renting or leasing another successful business model |
| franchisor | actual owner of the business that lets other investors rent or lease its name, business profile, and way of doing business |
| franchisee | the investor who rents or leases the business model from the franchisor and then hopes to recoup his or her investment by selling the franchisor's goods or services |
| horizontal merger | firms that produce the same kind of product join forces |
| vertical merger | companies involved in different stages of manufacturing, marketing or sales join together |
| conglomerate | firm with four or more businesses making unrelated products, with no single business responsible for a majority of its sales |
| multinational | corporation that has manufacturing or service operations in a number of different countries |
| venture capitalist | provider of investment funds to a start-up business in exchange for partial ownership of the business |
| angel investors | informal and usually affluent investors who provide funds to less-promising start-ups |
| crowdfunding | using social networking to appeal to potential investors |
| nonprofit organization | works in a businesslike way to promote the collective interests of its members rather than seek financial gain for its owners |
| credit union | nonprofit service cooperative that accepts deposits, makes loans, and provides other financial services |
| labor union | organization of workers formed to represent its members' interests in various employment matters |
| collective bargaining | process of negotiation between union and management representatives over pay, benefits, and job-related matters |
| chamber of commerce | nonprofit organization of local businesses whose purpose is to promote their interests |
| Better Business Bureau | business-sponsored nonprofit organization providing information on local companies to consumers |
Created by:
KristiWilliams