Business Structure Vocab
The legal responsibility of an individual (or entity) for actions, debts, and obligations.
What is liability?
The rivalry between companies selling similar products and services.
What is competition?
A business owned by one person, and where the owner has unlimited liability.
What is a sole proprietor?
Uses pricing to attract customers.
What is price competition?
A legal document that outlines the rights, responsibilities, and obligations of the individuals involved in a partnership.
What is a partnership agreement?
When companies offer essentially the same product or service, i.e. Coke and Pepsi, Ford and GM.
What is direct competition?
A business structure where one or more of the partners are not active, have no decision-making power, and are limited in their liability to the amount they invested.
What is a limited partnership?
Information that you collect directly from first-hand experience.
What is primary data?
The liability that extends beyond an individual’s financial investment in a company.
What is unlimited liability?
When products or services are not the same, but they could satisfy the same need, i.e. bicycles are indirect competition to automobiles.
What is indirect competition?
A hybrid business structure where all the partners have decision-making and management power, have limited liability, and can’t be held responsible for any of their other partner’s actions.
What is a limited liability partnership?
A market where a large number of companies provide essentially the same product and sell it at a similar price or the same price, and barriers to entry for new entrants are low.
What is pure competition?
A type of security that represents ownership in a company and signifies a claim on part of the company's assets and earnings.
What is a stock?
An economic system where companies are privately-owned, versus being owned by the government, and that assumes companies are built with a purpose of creating economic value through innovation, driven by a profit-motive, and where prices are set by the market via the ebb and flow of supply and demand.
What is capitalism?
A corporation governed by a board of directors, that sell shares of stock, reports financial information to the general public, and is heavily regulated by the government.
What is a public corporation?
Information that has already been collected from other sources.
What is secondary data?
Clearing houses that facilitate the buying and selling of stocks.
What is the stock exchanges?
A market where one company controls the supply of a good or service, where other options for consumers aren't readily available, and where the barriers to entry for other companies are highly restrictive.
What is a monopoly?
A hybrid business structure, where it combines the operational characteristics of a sole proprietorship or partnership while limiting the liability of the investors to the amount they invested.
What is a limited liability company (LLC)?
Allowed under strict supervision, when the government believes a large entity, like a utility company, can provide services more efficiently and more cost effectively than multiple smaller ones.
What are regulated monopolies?