Chapter 3 / Business Organizations

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Sole Proprietorship
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a business owned by one person
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Unlimited Liability
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business owner is fully responsibloe for all debts and losses
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Limited Life
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when the owner dies, quits or sells, the business ceases to exist
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Partnership
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a business 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 company
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Limited Partnership
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One partner is not active in the daily running of the business althougth they may have invested money in the company
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Article of Partnership
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a legal document drawn up to specify arrangements between partners
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Limited Liability
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the investors responsibility for the debts of the busiess is limited to the size of their investment
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Corporation
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a form of business recognized by law as a seperate legal entity
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Charter
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a government document that gives permission to create a corporation
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Stock
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shows ownership of a corporation
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Dividend
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a check that represents corporate earnings when the corporation makes a profit
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Common Stock
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basic ownership of a corporation, one vote per share when voting on board of directors
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Preferred Stock
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non-voting, recieve dividend checks before common stock holders do
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Unlimited LIfe
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business continues even when ownership changes
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Merger
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a combination of two or more business firms
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Horizontal Merger
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two or more businesses that produce the same kind of product merge
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Vertical Merger
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firms involved in different steps of manufacturing come together
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Conglomerate
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a firm that has at least four or more businesses making unrelated products
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Nonprofit Organizations
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run like a business without financial gain for its members
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Cooperative
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a nonprofit voluntary association formed to carry on some kind of economic activity that will benefit its members
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Consumer Cooperative
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voluntary association that buys bulk amounts of goods, such as food, for its members
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multinational
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corporation that has manufacturing or service operations in a number of different countries
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Service Cooperative
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deals with service rather than goods such a insurance or credit unions
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Producer Cooperative
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helps members sell their products
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Labor Unions
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organization formed to work for its members interests, such as better working conditions and/or benefits
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Professional Association
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group of specialized people that improve working conditions and skill levels

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