Types of Businesses: Vocabulary
Entrepreneur: someone who organizes a business venture and assumes the risk for it.
Sole proprietorship: a form of business organization that is owned and managed by one individual who assumes all risk of loss and receives all profits.
Partnership: a form of business organization that is owned by two or more individuals who assume all risk of loss and receive all profit.
Corporation: a form of business organization that is created by law, functions as a separate legal entity and is owned by two or more individuals called stockholders. Stockholders are at risk only for the amount of their financial investment.
Franchise: a system by which a firm expands into new neighborhoods and towns by selling the rights to use the company’s name and products to individuals. The franchising company provides training services and an advertising campaign for the purchaser of the franchise. In turn, the purchaser agrees to meet certain quality standards, provide certain products and pay a franchise fee to the franchising organization.