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34 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What is a Business Organizaton?
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An establishment formed to carry on commercial enterprise.
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A company or firm.
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What is Sole Proprietorship?
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A business owned and managed by a single individual.
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IRS reports it is about 75% of all businesses & generates 6% of all U.S.sales
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What is a Business License?
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Authorization to start a business issued by the local government.
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Certain professionals such as doctors or day-care providers are required to have one.
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What is a Zoning Law?
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Law in a city or town that designates separate areas for residency and for business.
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May prevent Sole Proprietors from operating business from their home. Zoning areas may be residential, commercial, industrial, or business areas.
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What is a Liability?
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The legally bound obligation to pay debts.
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S.P.'s are fully responsible for all business debts even to having to sell their personal property.
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What is a Fringe Benefit?
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Payment other than wages or salaries.
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Ex. include paid vacation leave, retirement pay, & health insurance.
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What is a Partnership?
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A business organization owned by two or more persons who agree on a specific division of responsibilities and liability.
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Account for 7% of all businesses, 5% of all sales, & 10% of all income.
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What is a General Partnership?
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Partnership in which partners share equally in both responsibility and liability.
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Ex. Doctors, Lawyers, accountants, retailers, farms, construction companies, et. al.
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What is a Limited Partnership?
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Parnership in which only one partner is required to be a general partner.
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Only one partner has unlimited personal liability for firm's actions with remaining partners contributing only money.
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What is a Limited Liability Partnership (LLP)?
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Partnership in which all partners are limited partners
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All partners are limited from personal liability in certain situations, such as another partner's mistakes.
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What are Articles of Partnership?
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A partnership agreement
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Legal document spelling out each partner's rights and responsibilities; outlines how partners will share profits or losses.
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What is the Uniform Partnership Act (UPA)?
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Act ordering common ownership interests, profit and loss sharing, and shared management responsibilities in a partnership.
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Partners can develop their own articles of partnership or fall under the UPA guidelines.
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What are Assets?
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Money and other valuables belonging to an individual or business.
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Improves a firm's ability to borrow funds for operations and expansions.
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What is a Corporation?
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A legal entity owned by individual stockholders.
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Legally regarded as an individual separate from its owners.
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What is Stock?
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A certificate of ownership in a corporation.
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If a Corporation issues 1,000 shares of stock & you purchase 1 share, you own 1/1000th of the company.
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What is a Closely Held Corporation?
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Corporation that issues stock to only a few people often family members.
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also called Privately Held Corporations.
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What is a Publicly Held Corporation?
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Corporation that sells stock on the open market.
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Shares may be bought and sold on the New York Stock Exchange.
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What is a Bond?
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A formal contract to repay borrowed money with interest at fixed intervals.
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A way of raising money by borrowing it.
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What is a Certificate of Incorporation?
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A license to form a corporation issued by state government.
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Must include: corporate name, statement of purpose, length of time business will run, founders' names & addresses, headquarters' mailing address, method of fund-raising, & rules for corporation's management.
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What is a Dividend?
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The portion of corporate profits paid out to stockholders.
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Profits that require stockholders to pay personal income tax at end of year
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What is a Horizontal Merger?
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The combination of two or more firms competing in the same market with the same good or service.
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Ex. John D.Rockefeller's Standard Oil Company in 1880s
or Chrysler & Daimler-Benz in 1998. |
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What is a Vertical Merger?
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The combination of two or more firms involved in different stages of producing the same good or service.
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Ex. Andrew Carnegie established the Carnegie Steel Company in 1890.
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What is a Conglomerate?
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Business combination merging more than three businesses that make unrelated products.
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A merger that usually does not result in decreased competition.
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What is a Multinational Corporation (MNC)?
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Large corporation that produces and sells its goods and services throughout the world.
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Transnational corporations which must obey laws & pay taxes in each country in which they operate.Ex. U.S. & Great Britain operated world's largest MNC's in 1970's & early 1980's. Today include Japan, S. Korea, the Netherlands & Italy.
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What is a Business Franchise?
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A semi-independent business that pays fees to a parent company in return for the exclusive right to sell a certain product or service in a given area.
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Parent companies are called Franchisers who develop the products & business systems.
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What is a Royalty?
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Share of earnings given as payment.
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Franchisers charge high fees for the right to use the company name & a share of their earnings.
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What is a Cooperative?
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A business organization owned and operated by a group of individuals for their mutual benefit.
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3 types: Consumer/purchasing Coops., service coops. & producer coops.
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What is a Consumer Cooperative?
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Retail outlet owned and operated by consumers.
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Can obtain goods at lower costs. Require membership fees and entrance cards. Ex. Sams Clubs, discount price clubs, book/record clubs, etc.
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What is a Service Cooperative?
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A cooperative that provides a service rather than a good.
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Ex. Credit Unions lend money to their members at reduced rates.
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What is a Producer Cooperative?
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Agricultural marketing cooperative that helps members sell their products.
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Agricultural marketing coops help members focus attention on growing crops or raising livestock & market for highest prices possible.
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What is a Nonprofit Organization?
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Institution that functions much like a business but does not operate for the purpose of generating profits.
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American Red Cross, Habitat for Humanity, hospitals, museums, adoption agencies, YMCAs, et.al.
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What is a Professional Organization?
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Nonprofit organization that works to improve the image, working conditions, and skill levels of peoplein particular occupations.
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Ex. National Teacher Association, Georgia Association of Educators, American Bar Association, American Medical Assoc.
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What are Business Associations?
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Nonprofit organization that promote collective business interests for a city, state or other geographical area, or for a group of similar businesses.
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Ex. Better Business Bureau, aims to protect consumers through an ethical and fair marketplace.
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What is a Trade Association?
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Nonprofit organization that promotes the interests of a particular industry.
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Ex. American Marketing Association improves marketer's & marketing firms images. Help industries including food processing and publishing industries.
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