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| A business owned and managed by one person |
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The legal responsibility to repay debts and to pay for damages resulting from a lawsuit |
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A business owned by two or more co-owners who share profits from the business and are legally responsible for the business’s debts |
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A business owned by shareholders who have limited liability for the firm’s debts. Because it is considered a legal entity, a corporation can conduct business affairs in its name. |
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| Multinational corporation |
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A corporation that does business in more than one country. |
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| An arrangement in which a parent company, or franchiser, distributes its products or services through independently owned outlets. The outlet owners, or franchisees, pay for the exclusive right to use the parent company’s trade name and sell its products or provide its services. |
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A business organization that is jointly owned and operated by a group of individuals for their mutual benefit. |
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| An organization that functions like a business but does not operate to make a profit. |
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| Business license/Business permit |
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A legal document that allows a business to be conducted in that city or town. |
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| Permits given by local governments that often designate certain areas, or zones, for specific business purposes. |
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If the business does not carry the owner’s legal name then the proprietor must submit a “doing business as” form to the local government office. |
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Full responsibility for paying any debts their businesses take on.
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| Limited liability company |
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As in a sole proprietorship, the proprietor of an LLC pays personal income tax on the business’s profits. |
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A form of business in which all co-owners have unlimited liability for any business debts. |
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The owners of a business who are also active in the operations of the business. |
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| A partnership that has at least one general partner and one or more limited partners. |
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| A partner that contributes financial capital but leave day-to-day business operations to the general partners. |
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| Another name for limited partners. |
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| Being responsible for only part of the ownership |
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| Limited liability partnership |
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| Co-owners are allowed to operate like general partners while enjoying the protection of limited liability. |
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| Money from an individual investor or organization that invests in promising new businesses in exchange for a share of ownership |
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| Privately held corporation |
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| Owned by an individual or a small group of individuals |
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A privately held corporation
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| Publicly held corporation |
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Offers stock for sale to the general public and has many shareholders |
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A governing body that is elected by the shareholders |
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someone from within the firm, such as the company’s founder or a senior-level manager. |
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someone from outside the firm who can provide an independent perspective. |
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| senior executives who oversee specific areas of the business. |
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a broad swath of managers that report to the corporate officers and other senior executives. |
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stock offered to the public. |
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| Articles of incorporation |
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also known as a corporate charter. |
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a charter that details the company’s objectives, structure, and planned operations. It also specifies the number of shares of stock that may be issued. |
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rules that govern the management of the corporation. |
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| a legal document that certifies ownership of the specific number of shares in the corporation. |
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a parent company that grants a license to operate an outlet in return for an initial payment and ongoing fees.
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the business owner who buys the license and distributes the franchiser’s products. |
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a percentage of the earnings that are paid by the franchisees to the parent company. |
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an organization that is created and supported by donated funds or property. |
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| it represent the interests of businesspeople in a geographical area. |
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| it represents the interests of people working in a particular industry. |
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| Professional organization |
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nonprofits that establish standards of training and ethics for professionals in their fields. |
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| organizations of workers in a specific industry |
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a distinctive name or symbol that identifies a firm and its products or services and that has been legally registered as the property of that firm. |
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the idea that businesses should take responsibility for the impact of their actions on society. |
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| anyone who has an interest in, or is affected by, a company’s actions. |
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principles of right and wrong that guide the actions of a company and its employees. |
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