Ch. 8-9 Vocab Set 1–Economics – Flashcards
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Sole Proprietorship
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a business owned and run by a single individual
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Sole Benefactor
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The owner keeps the profits without having to share them with other owners.
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Limited Life
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a firm legally ceases to exist when the owner dies, quits, or sells the business
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Partnership
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a business that is jointly owned by two or more people
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General Partnership
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all partners are responsible for the management and financial obligations of the business
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Limited Partnership
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at least one partner is not active in the daily running of the business and has limited responsibility for the debts and obligations of the business
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Corporation
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form of business organization recognized by law as a separate legal entity with all the rights of an individual.
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Charter
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a government document that gives permission to create a corporation
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Common Stock
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most basic form of corporate ownership, generally allows one vote per share for stockholders
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Stock
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ownership certificates
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Stockholders
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People who own stock of a company
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Preferred Stock
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represents non-voting ownership shares. Receive their dividends before common stockholders receive theirs.
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Dividend
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a check that transfers a portion of the corporate earnings
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Bond
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a written promise to repay the amount borrowed at a later date
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Double Taxation
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Profits are taxed when a corporation pays income taxes and profits are taxed a second time when shareholders pay taxes on their dividends.
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Franchise
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a temporary business investment that involves renting or leasing another firm's successful business model.
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Franchisor
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actual owner of the business that lets other investors rent, or lease its name, business profile, and way of doing business.
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Franchisee
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the investor who rents or leases the business model in hopes of recouping the investment by selling the franchisor's goods or services
