Stock Market & Business Structures

Private corporation

A corporation that doesn't sell shares to the public. You can't buy shares of a private company in the stock market.

Entrepreneur

A person who organizes, operates, and assumes the risk for a business venture.

Dividend

Part of a company's profits (earnings) that it pays as money to stockholders.

Common Stock

Shares of a company that do not guarantee a dividend and have more risk and volatility than preferred shares. Common stock holders have the benefit of providing shareholders with the right to vote for the board of directors as well as on issues that come before the board at the annual meeting of shareholders.

Preferred Stock

Shares of ownership of of a company in which the share holder is guaranteed a dividend if one is declared and whose shares are usually not as volatile as common stock.

Investor

Someone who risks funds by purchasing financial products with the hope the investments will increase in value over time.

Risk

The chance of losing all or part of an investment.

Public corporation

The stock of a public company is owned and traded by individual and institutional investors. In contrast, the stock is held by company founders, employees, and sometimes venture capitalists.

Entrepreneurs

people who own, operate, and take the risk of a business venture

Initial Public Offering

the initial sale of stock to the public by investment bankers.

Conglomerates

when two or more different corporations that work in very different industries combine into one corporate group.

Company

A business or association usually formed to manufacture or supply products or services for profit.

Corporation

A company legally separate from stockholders who own it and the managers.

Partnership

A company owned and managed by two or more people who share its profits or losses. A partnership is not separate from its owners, who are liable for the company's debts.

Sole-proprietorship

A company owned and run by one individual who receives its profits or bears its losses. A proprietorship is not separate from its owner, who is liable for the company debts.

Private Company

A company that is owed by a person, family, or small group of investors that does not sell shares of stock in the company to the public.

Public Company

A company that is owned by investors who buy shares of stock, partial ownership of the assets of a business, in the corporation usually through one of the stock exchanges.

Multinational

A company that operates in one or more countries outside its home country

Stock

A type of security that signifies ownership in a corporation and represents a claim to a part of the company's profits or losses. Companies usually issue stock to raise money for a variety of reasons, including expanding or modernizing their operations.

Franchise

contractual agreement to use the name and sell the goods or services of an existing company in a designated geographic area