Chapter 8: Types of Business Organizations

partnership

a business co-owned by two or more partners who agree on how responsibilities, profits, and losses of that business are divided

conglomerate

a business composed of several companies, each one producing unrelated goods or servieces

cooperative

a business operated for the shared benefit of the owners, who also are its customers

sole proprietorship

a business organization owned and controlled by one person

corporation

a business owned by stockholders, who own the rights to the company's profits but face limited liability for the company's debts and losses

unlimited liability

a business owner is responsible for all the business's losses and debts

limited liability

a business owner's liability for debts and losses of the business is limited

nonprofit organization

a business that aims to benefit society, not to make a profit

franchise

a business that licenses the rights to sell its products in a particular area

bond

a contract issued by a corporation that promises to repay borrowed money, plus interest, on a fixed schedule

unlimited life

a corporation continues to exist even after an owner dies, leaves the business, or transfers his or her ownership

multinational corporation

a large corporation with branches in several countries

franchisee

a semi-independent business that buys the rights to run a franchise

stock

a share of ownership in a corporation

limited life

a situation where a business closes in the owner dies, retires, or leaves for some other reason

limited liability partnership (LLP)

all partners are limited partners and not responsible for the debts and other liabilities of other partners

business organization

an enterprise that produces goods or provides services, usually in order to make a profit

limited partnership

at least one partner is not involved in the day-to-day running of business and is liable only for the funds he or she has invested

private company

controls who can buy or sell its stock

dividend

part of a corporation's profit that is paid out to stockholders

general partnership

partners share management of the business and each one is liable for all business debts and losses

public company

stock that can be publicly traded

vertical merger

the combining of companies involved in different steps of producing or marketing a product

horizontal merger

the combining of two or more companies that produce the same product or similar products