SOLE PROPRIETORSHIP, PARTNERSHIPS AND CORPORATIONS

CIVICS 8TH GRADE

Sole Proprietorship

A form of business that is owned and operated by one person.

Fictitious name

If a sole proprietor uses anything but his or her own name, the law calls the made-up name

Unlimited Liability

A business owner is responsible for all losses experienced by the business

Partnership

An association of two or more persons to carry on a business for profit.

General partnership

When two or more competent parties combine their money, labor, and skills for the purpose of carrying on a lawful business

Articles of partnership

An agreement expressed by both partners, which may be written or oral, before the partnership is established outlining the scope of the business and each owner's responsibilities.

Partnership by Proof of Existence

A partnership can be formed because of the way that two or more people conduct their business together regardless of the label given to the enterprise or the intent of the parties involved

Joint liability

In the event of a lawsuit, all the partners must be sued together

Corporation

A body formed and authorized by law to act as a single person, distinct from its members or owners

Shareholder

An individual who owns shares of a corporation

Share

A single unit of ownership of a corporation

Continuity of existence

A corporation continues to exist regardless of the life spans of the founders, shareholders, managers, and directors

Promoter(s)

A person(s) who carries out the incorporation process by taking the initial steps to organize, market, and finance a business

Articles of incorporation

An application for incorporation of a business that describes a corporation's organization, powers, and authority

Certificate of incorporation

A corporation's official authorization to do business in the state.

Bonds

Notes issued in return for money borrowed to fund various corporate activities

Common stock

The basic form of corporate ownership, which allows holders voting rights to elect the corporation's board of directors

Dividends

Company's share profits to the shareholders based on the corporation's performance

Preferred stockholders

Shareholders who have no voting rights for the board of directors, however they do receive fixed dividends and have priority over common stockholders to be paid first.