19.2 econ Assessment

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Capital Formation

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the transfer of money from households to businesses and government through investments and loans

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Limited Life

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situation in which a firm legally ceases to exist when an owner dies or quits

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Sole Proprietorship

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unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm.

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Unlimited Liability

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requirement that an owner is personally and fully responsible for all losses and debts of a business

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Partnership

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unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

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Stockholders

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people who own a share or shares of stock in a corporation

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limited partnership

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form of partnership where one or more partners are not active in the daily running of the business, and whose liability for the partnership's debt is restricted to the amount invested in the business

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dividends

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check paid to stockholders, usually quarterly, representing a portion of corporate profits

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Preferred Stock

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form of stock without vote, in which stockholders get their investments back before common stockholders

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Common Stock

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most basic form of corporate ownership, generally with one vote per share for stockholders