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Business Organization definitions Flashcards

Business Organization definitions
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  • Sole Proprietorship
    Business structure with a single owner, simple formation, and no legal separation between owner and business assets or liabilities.
  • Partnership
    Business arrangement involving two or more owners who share profits, responsibilities, and typically unlimited liability.
  • LLC
    Hybrid business entity offering limited liability to its members, separating personal assets from business debts and obligations.
  • Corporation
    Separate legal entity owned by stockholders, capable of unlimited lifespan and easy transfer of ownership through stock.
  • Personal Liability
    Owner's risk of losing personal assets if the business incurs debts or legal claims beyond its resources.
  • Unlimited Liability
    Condition where owners are fully responsible for all business debts, risking personal property to satisfy obligations.
  • Limited Liability
    Protection ensuring owners' personal assets are not at risk for business debts beyond their investment in the company.
  • Stockholder
    Individual or entity holding shares in a corporation, representing ownership and claim to part of the company's assets.
  • Member
    Owner of an LLC, whose liability is generally limited to their investment in the business.
  • Separate Entity
    Legal distinction where a business exists independently from its owners, with its own rights and obligations.
  • Unlimited Life
    Characteristic allowing a business, especially a corporation, to continue operating regardless of changes in ownership.
  • Transferability of Ownership
    Ability to change business ownership easily, often through the sale or transfer of shares or interests.
  • Pass-Through Taxation
    Tax treatment where business income is reported on owners' personal tax returns, avoiding separate business taxation.
  • Hybrid Business Organization
    Business structure combining features of multiple traditional forms, often providing special liability protections.
  • LLP
    Partnership structure granting limited liability to partners, protecting individuals from certain actions of other partners.