BUSINESS VOCABULARY

sole proprietorship-

a business owned by one individual who receives all the profits and personally bears all the losses and risks.

Partnership

a business in which ownership is shared by two or more people who receive all the profits and personally bear all the losses and risks.

Partnership agreement.

Corporation

a business that is owned by stockholders whose personal liability is limited to the value of their stock.

Corporation is a legal “person” with rights to buy, sell and make contracts.

Stock

a certificate representing a share of ownership in a corporation, votes for Board of Directors and receives dividends.

Private or publicly held?

nonprofit corporation

Corporation operating for educational, charitable or social purposes only.

A nonprofit corporation has a board of directors and officers, but no shareholders.

Red Cross. Highmark Blue Cross. UPMC.

cooperative

Alliance of individual businesses or farmers with similar interests.

They share marketing, shipping and related costs and then share the profits based on the capital or effort of each member.

Sunkist Orange Juice and Land-o-Lakes are examples of large farmer coops.

corporate bond

An IOU or promise to pay issued by a corporation to raise money.

The corporation pays a fixed sum annually as interest.

The bondholder does not need to own a share of stock in the corporation.

merger

the combination of two or more companies, either by the creation of a new organization or by absorption by one of the others.

franchise

A local business buy the permission to sell or distribute a national company's goods or services in a certain area.

McDonalds is example.