Unlimited Life Economics

business organization

an enterprise that produces goods or provides services, usually in order to make a profit

sole proprietorship

a business organization owned and controlled by one person

limited life

a situation where a business closes if the owner dies, retires, or leaves for some other reason

unlimited liability

means that a business owner is responsible for all the business's losses and debts

easy to open or close, few regulations, freedom and control, owner keeps profits

sole proprietorship advantages

limited funds, limited life, unlimited liability

sole proprietorship disadvantages

partnership

a business co-owned by two or more partners who agree on how responsibilities, profits, and losses of that business are divided

general partnership

partners share management of the business and each one is liable for all business debts and losses

limited partnership

partnership in which at least one partner is not involved in the day-to-day running of business and is liable only for the funds he or she has invested

limited liability partnership

all partners are limited partners and not responsible for the debts and other liabilities of other partners

easy to open and close, few regulations, access to resources, joint decision making, specialization

partnership advantages

unlimited liability, potential for conflict, limited life

partnership disadvantages

corporation

business owned by stock holders, who own the rights to the company's profits but face limited liability for the company's debts and losses

stock

a share of ownership in a corporation

dividend

part of a corporation's profit that is paid out to stockholders

public company

issues stock that can be publicly traded

private company

controls who buy or sell its stock

bond

contract issues by a corporation that promises to repay borrowed money, plus interest, on a fixed schedule

limited liability

means that a business owner's liability for debts and losses of the business is limited

unlimited life

means that a corporation continues to exist even after an owner dies, leaves the business, or transfers his or her ownership

access to resources, professional managers, limited liability, unlimited life

corporations advantages

start up cost and effort, heavy regulation, double taxation, loss of control

corporations disadvantages

horizontal merger

the combining of two or more companies that produce the same product or similar products

vertical merger

the combining of companies involved in different steps of producing or marketing a product

conglomerate

a business composed of several companies, each one producing unrelated goods or services

multinational corporation

large corporations with branches in several countries

franchise

business that licenses the right to sell its products in a particular area

franchisee

a semi-independent business that buys the right to run a franchise (pays a fee to the parent company in return for the right to sell the company's products or services in a particular area)

independent, good training, provide proven products at a low cost, franchiser pays for ads

franchises advantages

invest money with no assurance of success, share profits with franchiser, not have control over all aspects of business

franchise disadvantages

cooperative

business operated for the shared benefit of the owners, who also are its customer

nonprofit organization

business that aims to benefit society, not to make a profit