| A | B |
|---|
| sole proprietorship | business owned & controlled by one person |
| zoning laws | specify areas where various types of business activities can operate |
| liability | responsibility for debt |
| collateral | anything of value that one gives up if they cant' repay a loan |
| longevity | length of a firm's life |
| partnership | business owned & controlled by two or more people |
| general partnership | equal decision-making authority |
| limited partnership | partners join as investors; rarely active role in decision-making |
| Corporations | Legally distinct from their owners and are treated as if they were individuals. |
| Articles of Incorporation | Reviewed by state officials has 6 major pieces of information needed to setup a corporation |
| Corporate charter | Permits the formation of the new corporation. |
| Board of directors | The decision-making body. |
| Stock | Used to raise funds by corporations and it represents ownership of the firm. |
| Shares | Ownership issued in portions. |
| Dividends | Profits paid to a shareholder. |
| Common stock | Provides a voice in how the company is run and share in any potential dividends. |
| Preferred stock | Provides guaranteed dividends-paid before any received by holders of common stock-doesn’t grant a voice in running the corporation |
| Corporate bond | Is a certificate issued by a corporation in exchange for money borrowed from an investor. |
| Principal | Actual amount of money borrowed. |
| Interest | The amount borrower must pay for using the money. |
| Merger | When one company joins with or absorbs another. |
| Subsidiaries | Distinct divisions of the same company. |
| Franchise | An enterprise that uses the original company’s name to sell goods & services. |
| Cooperatives | Businesses that are owned collectively by their members. |
| Non-profit organization | Works in a businesslike way except they don’t work to earn a profit. |
