Sole proprietorship

Sole proprietorship

A company run by an individual as opposed to a group.

Liability

Any amount or debt that a firm or an individual owes.

Fringe benefits

Lack of larger business.

Partnership

Business organization owned by two or more people who agree on a division of responsibilities and profits.

General partnership

All partners share equally/Most common.

Limited partnership

One partner has full responsibility and liability, others only contribute money.

LLP

All partners are limited and function essentially as general partnerships.

Business franchise

Semi-independent business that pays fees to a parent company in exchange for selling a specific good/service.

Corporation

Legal entity owned by individual stockholders who have limited liability.

Stocks

Certificate of ownership.

Closely/privately held corp

Issue stock to only a few individuals who rarely trade their stock.

Publicly held corp

Many stockholders who can buy/sell stocks on the open market.

Horizontal merger

Two or more firms competing in the same market with the same good join together.

Vertical merger

Two or more firms involved in different stages of producing the same good join together.

Conglomerate

When three or more unrelated business combine.

Multinational corp

Corporation that produces and sells their goods/services in more than one country.

Cooperative

Business organization owned and operated by a group for their shared benefit.

Consumer co-op

Sell merchandise to their members at reduced prices.

Service co-op

Co-op that provides services instead of goods.

Producer co-op

Marketing co-ops that help members sell their goods.

Nonprofit org

Organizations that operate for the purpose of providing some benefit to the public, not to generate profit.

Learning effect

Education increases efficiency and results in higher wages.

Screening effect

Completion of colleges shows employers that an applicant is intelligent and hard-working.

Derived demand

Demand for labor set by the demand for another good/service.

Equilibrium wage

Wage rate that is set when the supply and demand of labor are equal.