Business Ownership and Legal Concepts

sole proprietorship

business owned and operated by one individual. the owner has unlimited personal liability

partnership

owned and operated by two or more individuals who share profits, losses, and responsibility. each partner had unlimited personal liability

corporation

a separate legal entity from its owners (shareholders) by providing limited liability protection. corporations can issue stocks and bonds to raise capital

franchise

an individual or company pays to use another’s company’s business model, trademark, and intellectual property. 

equity financing

raising capital by issuing shares of ownership (stocks) to investors. no repayment but ownership is diluted

debt financing 

borrowing funds from lenders with a promise of repayment plus interest

microlending

small loans (often under $50,000) provided to small businesses or entrepreneurs not eligible for traditional bank loans

angel investors

individuals investing their own money in startups for small businesses in exchange for equity or a management role.

trademark

a symbol, word, or phrase identifying a business or product and distinguishing it from others

copyright

legal protection for original words (literature, music, art, etc) prohibiting unaauthorized reproduction or distributions

patent

legal protection from inventions, granting exclusive rights to manufacture, use, and sell the invention for a set period. 

liability

being legally responsible for debts or obligations

asset

a valuable resource owned by a business

stock

ownership share in a corporation

bond

Debt investment in which an investor loans money to an entity.