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Types of Business
Objective 1.05
| Term | Definition |
|---|---|
| Acquisition | The process of taking possession of something (acquiring another business by purchasing) |
| Annual report | A document outlining the financial status of a business. |
| Asset(s) | Anything of value that a business or individual owns. |
| Better business bureau | A customer organization that monitors complains against businesses. |
| Board of directors | A group of people chosen to govern the activities of a corporation. |
| Business-format franchise | A franchise arrangement in the franchisee must operate under the trade name of the parent company that provides continuous assistance in setting up and operating the business. |
| "C" Corporation | A form of business ownership that is considered a separate legal entity from its owners; can be owned by unlimited stockholders and is susceptible to dual taxation; also known as a public corporation. |
| Capital | Assets of a business. |
| Commission | A percentage of the total sale amount paid to the individual or business that makes the sale. |
| Consolidation | A form of business growth in which a corporation acquires many smaller companies. |
| Corporation | A form of business ownership that is owned by stockholders who have purchased units or shares of the company; an "artificial being, invisible, intangible, and existing only in contemplation of law" (U.S. Supreme Court) |
| Dealership | See product trade-name franchise. |
| Dividend | A sum of money paid to an investor or stockholder as earnings on an investment. |
| Dual/Double Taxation | The levying of two taxes on the same income. (tax on corporation's income as well as dividends) |
| Exclusive Distributorship | See product trade-name franchise. |
| Expansion | A form of business growth in which a company extends its operations or facilities using new capital or reinvesting funds. |
| Franchise | A contractual agreement between a parent company and franchisee to distribute goods or services. |
| Franchisee | One who buys the right to sell the goods or services of the parent company (franchisor). |
| Franchising | A method of distributing recognized goods and services through a legal agreement between two parties. |
| Franchisor | A parent company and owner of the name and/or system that is being distributed through a contractual franchising agreement. |
| General Partnership | A partnership agreement in which all partners are liable for a business's losses; also known as ordinary partnership. |
| Hybrid Structure | A form of business ownership that combines elements of corporations and either sole proprietorships or partnerships. |
| Joint Venture | An arrangement that involves two or more businesses entering into a relationship by combining complementary resources, such as technology, skills, capital, or distribution channels, for the benefit of all parties; the relationship is usually short-term. |
| Licensee | The buyer of copyrighted, patented, or trademarked material. |
| Licensing | A business structure that requires the authorization of permission from an owner to another entity to use trademarked. |
| Licensor | The owner of copyrighted, patented, or trademarked material. |
| Limited Liability | Restricted chance of loss; a condition in which business owners risk only the amount of their investment. |
| Limited Liability Company (LLC) | A form of business ownership in which members of a corporation experience limited liability; there is limited taxation on company income and limited life for the business entity. |
| Limited Liability Partnership (LLP) | A form of business ownership that i generally used by business professionals for the purpose of protecting innocent partners from malpractice of the other partners. |
| Limited Partnership | A type of agreement in which a least one partner has limited liability and a general partner has unlimited liability. |
| Master Licensee | A person or firm who helps franchisors find franchisees in a particular region or territory. |
| Merger | Two individual businesses that combine to form one organization. |
| Multi-Level Marketing | A business structure that pays commissions on sales earned to people at two or more levels; the ales representatives usually work independently of the company; the reps. not only sell products but get others to sell also. |
| Nonprofit Corporation | A legal business structure that primarily operates for the purpose of serving others, not to make profit; income is used to cover operational expenses and can be exempt from paying some or all taxes. |
| Operating Agreement | A written document signed by members of a LLP or LLC that specifies the terms pf their business arrangement. |
| Partnership | A form of ownership in which the business is owned by two or more persons. |
| Piggyback Franchise | A form of ownership in which a retail franchise operates within facilities of another store, often referred to as the host. |
| Private Corporation | A type of corporation owned by a few people that does not its shares for sale to the general public; also known as closely held, or close, corporation. |
| Private Enterprise System | An economic system in which individuals and groups , rather than the government, own or control the means of production. |
| Product Trade-Name Franchise | A franchise arrangement based on an independent sales relationship between a franchisor and franchisee to stock and sell a specific line of goods. |
| Public corporation | a type of corporation that usually sells millions of shares of stock to many stockholders. |
| Pyramid Schemes | A illegal form of multi-level marketing in which emphasis is placed on collecting initial fees from as many people as possible. |
| Royalty | Fees paid to a parent company that are often based on a percentage of the franchise's profits. |
| Shareholders | Owners of stock; also known as stockholders. |
| Sole Proprietorship | A business owned by one person who receives all the profits from the business and takes all the risks. |
| Stockholders | Owners of stocks; also known as shareholders |
| Subchapter "S" Corporation | A type of corporation that is limited to 100 or fewer shareholders. |
| Unlimited Liability | Requirement that business owners have to be responsible for paying business debt' personal assets can be used to pay the debt. |
Created by:
Alyson L.
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