POBF

Objective:

OBJECTIVE 2.01

VOCABULARY

2.00 Understand the types of business ownership.

Directions: Define each of the vocabulary terms.

1. Alien corporation: Chartered in another nation, but doing business in a state.

2. Articles of incorporation: Written legal documents that identify ownership and operating
procedures and conditions for a business
3. Board of directors: The people who make the major policy and financial decisions for the
business.
4. Cooperative: A business formed and owned by a group of individuals or businesses to serve
their needs in order to gain
5. Corporation: A separate legal entity, formed by documents filed with the state, which is owned
by one or more shareholders and managed by a board of directors
6. Domestic corporation: Chartered in a specific state
7. Dormant partnership: Partner plays no role and is not known to the public
8. Double taxation: Taxing on profits and earnings.
9. Foreign corporation: Chartered in one state, but doing business in another state
10. Franchise: A written contract granting permission to operate a business to sell products and
services in a set way.
11. Limited liability: A partnership in which some investors cannot lose more than the amount of
their investment, but are not allowed to participate in the day-to-day management of the
business.
12. Limited Liability Company (LLC): A corporation which is much like a partnership and limits
the liability of the owners.
13. Nonprofit corporation: A group of people who join to do some activity that benefits the public.
14. Partnership: A business owned and controlled by two or more people who have entered into a
written agreement.
Small Business Entrepreneurship

POBF

OBJECTIVE 2.01

VOCABULARY

15. Private corporation: A corporation established by individuals for business or charitable

purposes.
16. Public corporation: A corporation established for government purposes.
17. Secret partnership: Plays an active role but is secret from society
18. Silent partnership: Does not have an active role but is known to the public.
19. Sole proprietorship: A business owned and run by just one person. It is the most common
form of business ownership.
20. Stockholder: Someone that owns a piece of the company.
21. Stock: One purchased vote in company decisions.
22. Subchapter S corporation: A corporation which passes all income through to the owners
based on their investment and is taxed on their individual tax returns.
23. Termination: Final step in the progressive employee discipline process where his or her
employment with the employer is permanently severed.
24. Unlimited liability: Indefinite extent of liability to pay a firm's debts or obligations, extending
beyond the investments of the firm's owner(s), partners, or shareholder(s) to their personal
assets.

Small Business Entrepreneurship