Chapter 8 Terms

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entrepreneur

a person who organizes, manages, and assumes the risks of a business in order to gain a profit

inventory

supply of items or materials used in a business

receipts

income received from the sale of goods and/or services

sole proprietorship

a business owned and operated by one person

unlimited liability

complete legal responsibility for all debts of doing business

assets

property owned by a person or company, regarded as having value and available to meet debts, commitments

partnership

two or more individuals own and operate a business

limited partnership

not all of the partners are equal

\-only contribute funds or property

\-have no say in management

\-have no liability for losses

limited liability company

type of business structure that protects partners from losing their personal wealth

joint venture

a temporary partnership created to accomplish a specific task for a short period of time

corporation

an organization owned by many people but treated by law as a “legal person”

stock

a share of ownership or ownership rights to future profits and assets of the corporation

articles of incorporation

lists basic info of the corporation

corporate charter

license to operate granted by the state where it is established

preferred stock

\-no voting rights

\-guaranteed a dividend each year: portion of profits paid to shareholders

dividend

a sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves)

common stock

\-voting rights

\-no guarantee of a dividend: whatever is left after preferred stockholders are paid

bylaws

set of rules for the corporation

limited liability

limited to stockholder’s investment

franchise

contract in which a corporation sells the rights to use its name and sell its products