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sole proprietorship |
unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States. |
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Proprietorship |
A business owned by one person |
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Unlimited Liability |
requirement that an owner is personally and fully responsible for all losses and debts of a business; applies to proprietorships, general partnerships. |
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Inventory |
stocks of goods held in reserve; includes finished goods waiting to be sold and raw materials to be used in production |
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limited life |
situation in which a firm legally ceases to exist when an owner dies, quits, or a new owner is added; applies to sole proprietorships and partnerships. |
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Partnership |
unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm; same as general partnerships |
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Limited Partnership |
Form of partnership where one or more partners are not active in the daily running of the business, and whose liability for the partnership's debt is restricted to the amount invested in the business. |
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Bankruptcy |
Court-granted permission to an individual or business to cease or delay payment on some or all debts for a limited amount of time. |
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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, sue and be sued. |
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Charter |
written government approval to establish a corporation; includes company name, address, purpose of business, number of shares of stock, and other features of the business. |
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Stock |
certificate of ownership in a corporation; common or preferred stock |
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Stockholder |
person who owns a share or shares of stock in a corporation; same as shareholders |
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Shareholder |
person who owns a share of stocks in a corporation |
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Dividend |
a check representing a portion of the corporate earnings to each stockholder |
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Bond |
formal contract to repay borrowed money and interest on the borrowed money at regular future intervals |
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Principal |
Amount borrowed when getting a loan or issuing a bond |
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Interest |
payment made for the use of borrowed money; usually paid at periodic intervals for long-term bonds or loans |
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Double Taxation |
feature of taxation that allows stockholders' dividends to be taxed both as corporate profit and as personal income. |
