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13.8: Key Terms

  • Page ID
    51122
    • Michael Laverty and Chris Littel et al.
    • OpenStax
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    B corporation
    business that meets a very high standard of social and environmental performance, public transparency, and accountability to balance profit with social purpose
    business purpose
    reason the entrepreneur forms the company and determines who benefits from it, whether it is the entrepreneur, customers, or some other entity
    business structure
    legal organization of a business; also called entity selection
    C corporation
    corporation taxed the corporate level, and then again on the owners’ personal income tax returns if corporate income is distributed to the shareholders as dividends
    capital
    money raised for operating a business
    corporation
    complex business structure created by filing the appropriate documents with the state of incorporation
    economic nexus
    virtual connection with a state based on sales volume or number of transactions
    enterprise risk management
    integrated cross-disciplinary approach to monitoring risk
    equity crowdfunding
    raising of capital through the online sale of securities to the general public
    financial risk
    starting a new business with insufficient funds to sustain operations over an extended period of time
    for-profit business
    business structure designed to create profits that are distributed to the owners
    general partnership
    business created when two or more individuals or entities agree to work together to operate a business for profit
    insurance
    spreading risk over a large number of people (policyholders)
    joint venture
    temporary partnership in which two different enterprises combine for the purpose of mutual benefits such as sharing of expenses and to work toward shared goals and the associated potential revenue
    legal risk
    risk stemming primarily from a breach of contract, a regulatory violation, and/or the commission of a tort
    limited liability company (LLC)
    hybrid of a corporation and a partnership that limits the owner’s liability
    limited liability partnership (LLP)
    business arrangement for professional partnerships, such as law firms or accounting firms, in which partners are licensed professionals, with limited liability for financial obligations related to contracts or torts, but full liability for their own personal malpractice
    limited partnership (LP)
    business arrangement that has at least one general partner and one or more limited partners
    not-for-profit organization (NFPO)
    business structure that is usually dedicated to furthering a particular social cause or for advocacy related to a common shared interest by using its surplus revenues to achieve its ultimate objective
    partnership
    business entity formed by two or more individuals, or partners, each of whom contributes something such as capital, equipment, or skills
    privately held corporation
    company that does not allow members of the investing public to own stock; instead, it is owned by the founder’s family or friends, or a private group of investors
    public corporation
    quasi-governmental entity, a corporation owned or sponsored by the government
    publicly held corporation
    entity in which members of the investing public own the stock
    S corporation
    “pass-through” entity, also known as a small corporation, where shareholders report and claim the business’s profits as their own and pay personal income taxes on it
    sole proprietorship
    business entity that is owned and managed by one individual that has very little formal structure and no mandatory filing/registration with the state

    This page titled 13.8: Key Terms is shared under a CC BY 4.0 license and was authored, remixed, and/or curated by Michael Laverty and Chris Littel et al. (OpenStax) via source content that was edited to the style and standards of the LibreTexts platform; a detailed edit history is available upon request.