ECONOMICS
Business Organization - Ch 8
Business Organization
What is an establishment formed
to carry on a commercial enterprise?
Asset
What is the name of money and other valuable
belongings to an individual or business?
Partnership
Sole Proprietorship
What is a business owned by and managed
by a single individual with unlimited liability?
What is an organization owned by two or more persons who
agree on a specific division of responsibilities and profits?
Business License
General Partnership
What is the authorization to start a business issued
by the local government?
What is a partnership in which partners share equally
in both responsibility and liability?
Zoning Law
Limited Partnership
What is a law in a city or town that
designates separate areas for residency and for business?
What is a partnership in which only one partner
is required to be a general partner?
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Business Organization - Ch 8
Limited Liability Partnership (LLP)
Liability
What is the legally bound obligation to pay debts?
What is a partnership in which all partners are limited partners?
Fringe Benefits
Losing only their investment
What is a payment other than wages or salaries?
What do Limited Partners risk?
Human Capital
Corporation
.
Limited access to resources include physical capital
(such as savings), time, and what else?
What is a legal entity owned by individual stockholders?
Incorporation
Double Taxes
Advantages of Incorporation
- Limited liability for owners
- Transferable ownership
- Ability to attract capital
- Long life
Since the law considers that corporations are legal entities that are
separate from their owners, what do they have?
What is the forming of a corporation?
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Business Organization - Ch 8
Conflict
Stock
What do all partnerships have the potential for?
What is a certificate of ownership in a corporation?
Entrepreneur
Bond
What type of person typically starts up a business?
What is a formal contract to repay borrowed money
with interest at fixed intervals?
Closely Held Corporation
Publicly Held Corporation
What is a privately held corporation
that rarely trades its stock?
What is a corporation that sells stock
on the open market?
Multinational Corporation
Conglomerate
What is a corporation that produce and sell
their goods and services throughout the world?
What is a combination of companies that produce
totally unrelated goods and services?
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Business Organization - Ch 8
Vertical Merger
Horizontal Merger
What is the combination of two or more firms involved in
different stages of producing the same good or service?
What is the combination of two or more firms
competing in the same market for a good or service?
Royalty
Business Franchise
What is the share of earnings given as a payment in a
franchise?
What is a semi-independent business that pays fees to a parent company in
return for all the exclusive rights to sell a certain service or product?
Nonprofit Organization
Cooperative
What is an institution that functions much like a business,
but does not operate for the purpose of earning profits?
What is a business organization owned and operated by
a group of individuals for their mutual benefit?
1. What role do business licenses and zoning laws play in sole proprietorships?
Business licenses grant permission to undertake and carry out any business, while zoning laws influence where
businesses may be located.
2. What kind of liabilities are sole proprietorships subject to?
They are responsible for all debts that the business may acquire. They are said to have unlimited personal liability.
3. Why are many sole proprietorships able to offer few fringe benefits to workers?
Most sole proprietorships are small, so they have limited resources to allocate for benefits to both employees and
owners.
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Business Organization - Ch 8
4. Why might accountants and physicians find limited liability partnerships attractive?
These professionals are more than likely to be sued, and individuals need not to be held liable for the mistakes of
others.
6. Why might advantages of partnerships outweigh the disadvantages?
Advantages include any of the following: the opportunity for shared assets, capital, resource, and/or decisions.
5. Why must stock holders pay taxes on dividends?
Profit is a form of income, and dividends are the portion of corporate profits that is paid to stockholders. Stockholders
must then pay income tax on the profit they receive from dividends.
Week 8 of 13.
The 8 quiz towards your midterm
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