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34 Cards in this Set

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