ENT Chapter 3
Partnership Agreement
Legal document that clearly defines how the work, responsibilities, rewards, and liabilities of a partnership will be shared by the partners.
Liability
Legal obligation of a business owner to use personal money and possessions to pay the debts of the business; Any outstanding bill or loan that must be repaid.
Partnership
Legally defined type of business organization in which at least two individuals share the management, profit, and liability.
Share of Stock
Unit of ownership in a corporation.
Franchise
Business arrangement in which an established company sells the right for others to use the company's name and operating plan to sell products or services
Cooperative
Business owned, controlled and operated for the mutual benefit of its members-people who use its services, buy its goods, or are employed by it.
Unlimited Liability
Business owner can be legally forced to use personal money and possessions to pay the debts of the business.
Limited Liability
Business owner cannot be legally force to use personal money and possessions to pay business debt.
Wholesaling Business
Business that buys goods in large quantities, typically from manufacturers, and resells them in smaller batches to retailers. Also called a wholesaler.
Wholesaler
Business that buys goods in large quantities, typically from manufacturers, and resells them in smaller batches to retailers. Also called a wholesaling business.
Retailing Business
Business that buys goods, often from wholesalers, and resells the goods in small quantities directly to consumers. Also called a retailer.
Retailer
Business that buys goods, often from wholesalers, and resells the goods in small quantities directly to consumers. Also called a retailing business.
Manufacturing Business
Business that converts materials into goods suitable for use and sells those goods to others. Also called a manufacturer.
Manufacturer
Business that converts materials into goods suitable for use and sells those goods to others. Also called a manufacturing business.
Service Business
Business that provides and sells services to customers for a fee.
Subchapter S Corporation
Corporation that differs from a C corporation in how it is taxed. Its income or loss is applied to each shareholder and appears on their tax return.
C Corporation
Corporation that is taxed as an entity by the federal government.
Incorporate
Set up a corporation in accordance with the laws of the particular state where the business is located.
North American Industry Classification System
Classification system that assigns a numerical code to every industry in North America based on its primary business function
Sole Proprietorship
Legally defined type of business ownership in which a single individual owns the business, collects all profit from it, and has unlimited liability for its debt.
Corporation
Legally defined type of business ownership in which the business is considered a "person" (entity) under the law, and limited liability is granted to the business owner(s)
Nonprofit Corporation
Legally defined type of business ownership in which the company operates not to provide profit for its shareholders but to serve the good of society.
Limited Liability Company
Legally defined type of business ownership similar to a C corporation but with simpler operating requirements and tax procedures, and greater liability protection for the business owners.
Stockholders
Owners of a corporation. Also called shareholders.
Shareholders
Owners of a corporation. Also called stockholders.
General Partnership
Partnership in which all partners have unlimited liability.
Limited Partnership
Partnership in which at least one partner has limited liability for the debts of the business.
Dividend
Payment corporations make to their shareholders, being a portion of the corporation's profit.
Reseller's Permit
Special permit, required by most states, that retailers must have to purchase goods tax-free from wholesalers and collect sales tax from end buyers.
Trade Business
Term used to refer to a wholesale business or a retail business.