Types of Business Ownership Flashcards

Types of Business Ownership Flashcards
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Consumer Cooperative
We use this term when referring to cooperatives that are owned by customers, instead of workers.
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Hybrid Cooperative
If you set up this kind of cooperative then your business will be owned and controlled by customers and employees.
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Producer Cooperative
Workers own cooperatives of this type.
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Agricultural Cooperative
These cooperatives deal in agricultural products. Examples include Sunkist and Land-O-Lakes.
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Energy Cooperative
These cooperatives are typically formed in rural areas by electric utility companies.
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Housing Cooperatives
Cooperatives of this type are concerned with purchasing real estate.
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Retail Cooperatives
Some small retailers are forming these cooperatives to stay competitive against larger retailers.
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Credit Unions
These cooperative banking institutions offer members both banking and lending services.
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First In, First Out (FIFO) Inventory Valuation Method
If you use this kind of inventory valuation method you function under the assumption that the first items placed in your inventory will also be sold first.
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Periodic Inventory System
A kind of inventory system that only updates at certain times.
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Perpetual Inventory System
Businesses that use this kind of inventory system will be able to update their inventory as they make sales.
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Net Income Formula
A formula used by merchandising companies in order to determine how much profit they made in an accounting period. This formula is: sales - cost of goods sold - expenses.
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Merchandising Company
This kind of business works to purchase and then resell products at a higher price in order to make a profit.
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General Partnership
A type of business partnership where all partners share liabilities, benefits and responsibilities for the business. The IRS doesn't tax this kind of partnership as a separate entity.
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29 cards in set

Flashcard Content Overview

You can work with these flashcards to easily review sole proprietorships, limited partnerships, general partnerships, limited liability partnerships and corporations. You'll also be able to go over details about nonprofit corporations and business cooperatives.

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General Partnership
A type of business partnership where all partners share liabilities, benefits and responsibilities for the business. The IRS doesn't tax this kind of partnership as a separate entity.
Merchandising Company
This kind of business works to purchase and then resell products at a higher price in order to make a profit.
Net Income Formula
A formula used by merchandising companies in order to determine how much profit they made in an accounting period. This formula is: sales - cost of goods sold - expenses.
Perpetual Inventory System
Businesses that use this kind of inventory system will be able to update their inventory as they make sales.
Periodic Inventory System
A kind of inventory system that only updates at certain times.
First In, First Out (FIFO) Inventory Valuation Method
If you use this kind of inventory valuation method you function under the assumption that the first items placed in your inventory will also be sold first.
Credit Unions
These cooperative banking institutions offer members both banking and lending services.
Retail Cooperatives
Some small retailers are forming these cooperatives to stay competitive against larger retailers.
Housing Cooperatives
Cooperatives of this type are concerned with purchasing real estate.
Energy Cooperative
These cooperatives are typically formed in rural areas by electric utility companies.
Agricultural Cooperative
These cooperatives deal in agricultural products. Examples include Sunkist and Land-O-Lakes.
Producer Cooperative
Workers own cooperatives of this type.
Hybrid Cooperative
If you set up this kind of cooperative then your business will be owned and controlled by customers and employees.
Consumer Cooperative
We use this term when referring to cooperatives that are owned by customers, instead of workers.
Limited Liability Partnership
Individuals setting up this kind of business partnership will all carry a small degree of personal liability for their company's financial obligations. They also need to register with the state.
Disadvantages of Limited Liability Partnerships
The main disadvantage to this kind of partnership is that each individual is personally liable for anything they do, so a partner can be sued directly.
Limited Partnership
A form of business ownership where at least one partner makes all business decisions and acts as a general partner while other, limited partners, provide monetary investments with little control.
Nonprofit Corporation
This kind of corporation makes no profit. It uses any money it receives to pay debts, with any extra money being put back into the corporation.
Advantages of Nonprofit Corporations
These corporations offer limited liability protection to owners, are allowed to receive grants and may also be given tax deductible donations.
Corporations
Businesses with this structure have liabilities and powers that are considered separate from the liabilities and powers of the business owners.
Shareholders
These individuals share ownership of a corporation and hold common stock. They receive part of the company's profits while bearing no personal liability for company debts.
Board of Directors
A group of individuals in a corporation who are responsible for checking out major plans and approving them. They provide oversight to the business.
Chief Executive Officer
This individual is the member of the management team with the highest rank in the company. He or she will report to the board of directors directly.
Inside Directors
These board members have a role within a company, either as shareholders or important managers. If they're managers they're also referred to as executive directors.
Chairman of the Board
This individual is responsible for leading a corporation and making sure the board of directors runs effectively.
Sole Proprietorship
If you open this kind of business you will have full ownership of your company. Your profits will be considered part of your income and your business won't be taxed.
Disadvantages of Sole Proprietorships
This kind of business may experience disadvantages when raising money or getting loans from a bank. The owner is also personally responsible for liabilities and debt.
Advantages of Limited Liability Corporations
These corporations allow owners to file individual tax returns, instead of business taxes. They also offer limited liability protection.
Cooperatives
These organizations are made by people who share an economic goal. They can are owned by their members.

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