business organizations study

what business organization earns 25% of business profits

sole proprietorship

what percent of partnerships are there iin the US

9%

what percent of business do corporations do in the US

90%

charter

tells how much stock corporation may sell to stock holdrs or shareholders

what business organization is taxed Twice

corporation

what organization must pay corporate income tax

corporation

why do businesses merge

efficiiency

eliminate rivals

to grow (sometimes quickly)

multinational

manufacturer or service operations in a number of different countries

cooperative associations

business organizations based on the belief that if individuals work together they can benefit one another.

sole proprietorship

a business owned and managed by a single individual

business license

authorization to operate a business issued by a local government

zoning laws

laws in a city or town that designate certain areas, or zones, for residential and business use

liability

the legal obligation to pay debts

fringe benefits

payments to employees other than wages or salary

partnership

a business organization owned by two or more persons who agree on a specific division of responsibilities and profits

general partnership

a type of partnership in which all partners share equally in both responsibility and liabilit

limited partnership

a type of partnership in which only one partner is required to be a general partner

limited liability partnership

a type of partnership in which all partners are limited partners

artlcles of partnership

a partnership agreement that spells out each partner's rights and responsibilities

assets

the money and other valuables belonging to an individual or business

business franchise

a semi-independent business that pays fees to a parent company in return for the exclusive right to sell a certain product or service in a given area

royalties

the share of earnings given by a franchisee as payment to the franchise

corporation

a legal entity, or being, owned by individual stockholders, each of whom has limited liability for the firm's debts

closely held corporation

a type of corporation that issues stock to only a few people, who are often family members

publicly held corporation

a type of corporation that sells stock on the open market

bond

a formal contract issued by a corporation or other entity that includes a promise to repay borrowed money with interest at fixed intervals

certificate of incorporation

a license to form a corporation issued by a state government

dividend

the portion of corporate profits paid out to stockholders

limited liability corporation

a type of business with limited liability for the owners, with the advantage of not paying corporate income tax

horizontal merger

the combination of two or more firms competing in the same market with the same good or service

vertical merger

two or more firms involved in different stages of producing the same good or service

conglomerate

a business combination merging more than three businesses that produce unrelated products or services

multinational corporation

a large corporation that produces and sells its goods and services in more than one country

cooperative

a business organization owned and operated by a group of individuals for their shared benefit

consumer cooperative

a retail outlet owned and operated by consumers that sells merchandise to members at reduced prices

service cooperative

a type of cooperative that provides a service rather than a good

producer cooperative

an agricultural marketing cooperative that helps members sell their products

nonprofit organization

an institution that functions much like a business, but does not operate for the purpose of generating profit

professional organization

a nonprofit organization that works to improve the image, working conditions, and skill levels of people in particular occupations

business association

a group organized to promote the collective business interests of an area or group of similar businesses

trade association

nonprofit organizations that promote the interests of particular industries

advantages of sole proprietorships

easy to start

few regulations

sole receiver of profit

full control

disadvantages of sole proprietorships

unlimited liability

limited access to resources

limited life

may be to small to be efficient

advantages of partnerships

easy to start

easy to manage

no special taxes

easier financial capital

better employee

disadvantages of partnerships

unlimited liability

potential conflict

limited life

advantages of a franchise

management and training support

standardized quality

national advertising programs (parent company pays for ads)

financial assistance

centralized buying power franchises

disadvantages of franchise

buying into franchise is expensive

high fees to start

strict operation rules

purchasing restrictions

limited producr line franchise (only products approved by parent company

advantages of corporations

good for stockholders (limited liability)

grow corporation

easy financial capital

hired best managers

limited liability for owners (stockholders)

easy to transfer ownership

disadvantages of corporation

expense to start up

certification of incorporation

double tax

loss of control

must pay corporate income tax

government regulation

do cooperatives pay income tax on their earnings

no