Business 1.10

Articles of Incorporation

Documents filed with a governmental body to legally establish a corporation as a recognized entity under state law. 

Benefit Corporation (B Corp)

A corporation that explicitly considers public benefit in its decisions rather than only maximizing shareholder value. 

C Corporation (C Corp)

A corporation that can sell unlimited shares of its stock to the general public, is heavily regulated by the government, and reports its financial information to the public.

Corporation

A legal entity that is separate from its owners and controlled by a board of directors; the entity has most of the same rights and responsibilities that individuals possess but offers limited liability.

General Partnership

A business structure where all the partners have decision-making and management power, and have unlimited liability, meaning they can lose more than they invested. 

Liability

The legal responsibility of an individual (or entity) for actions, debts, and obligations. 

Limited Liability

The liability restricts an individual’s potential loss to the total amount of their investment in a company. 

Limited Liability Company

A hybrid business structure, where it combines the operational characteristics of a sole proprietorship or partnership while limiting the liability of the investors to the amount they invested.

Limited Liability Partnership

A hybrid business structure where all the partners have decision-making and management power, have limited liability, and can’t be held responsible for any of their other partner’s actions.

Partnership

A business owned by two or more people. 

Partnership Agreement

A legal document that outlines the rights, responsibilities, and obligations of the individuals involved in a partnership. 

Private Corporation

A corporation with a small group of owners that does not sell its stock to the general public, and or report its financial information to the public.

Limited Partnership

A business structure where one or more of the partners are not active, have no decision-making power, and are limited in their liability to the amount they invested.

Public Corporation

A corporation governed by a board of directors, that sell shares of stock, reports financial information to the general public, and is heavily regulated by the government. 

S Corporation (S Corp)

A corporation that meets specific Internal Revenue Code requirements and passes corporate income (or loss) through to its shareholders for federal tax purposes.

Security

A financial instrument that holds some type of monetary value and can be traded in the financial markets. 

Sole Proprietorship

A business owned by one person, and where the owner has unlimited liability.

Stock

A type of security that represents ownership in a company and signifies a claim on part of the company's assets and earnings.

Stock Exchanges

Clearing houses that facilitate the buying and selling of stocks.

Unlimited Liability

The liability that extends beyond an individual’s financial investment in a company.