Business Organizations

These flashcards cover key vocabulary terms related to business organizations, their definitions, and important concepts that will aid in exam preparation.

Corporation

A legal entity chartered by the state, with a separate and distinct existence from its owners.

Business

Any commercial enterprise, usually organized for profit of its owners, and typically involving the provision of goods or services to a customer.

Creditors

Persons or entities to whom money is owed.

Franchisees

Persons or entities granted a franchise to market or sell the franchisor’s goods or services, usually under a franchise agreement.

Limited Liability

Any type of investment where the investor’s maximum possible losses is the amount invested; other assets are not reachable by creditors.

Sole Proprietor

A type of business where there is no legal distinction between the business and its owner.

Entrepreneur

A person who organizes a business and carries the risk of loss and reward of profit with it.

Venture Capital

Money invested in an unproven or new start-up business.

Joint and Several Liability

A form of liability where creditors can pursue their entire claim against one, several, or all possible defendants.

Limited Partnership

A form of partnership that provides limited liability to certain partners who agree to refrain from management of the business.

General Partnership

Association of two or more persons in an unincorporated entity to do business and share profits and losses.

Articles of Incorporation

A legal document that creates a corporation when filed and approved by the relevant state authority.

Limited Liability Company (LLC)

A hybrid form of business that provides limited liability to owners while being treated as a partnership for tax purposes.

Bylaws

Rules and regulations adopted by a corporation for its own internal governance.

Double Taxation

The imposition of two or more separate taxes on the same pool of money.

Dividends

A portion of a corporation’s net income designated by the board of directors and returned to shareholders.