Business Entities and Terms

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Sole Proprietorship

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A type of business entity that is owned and run by one individual, with no distinction between the business and the owner.

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Partnership

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A business entity in which two or more individuals manage and operate the business with shared profits and responsibilities.

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Limited Partnership

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A partnership where at least one partner has limited liability, meaning they are not personally responsible for the debts of the business beyond their investment.

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Corporation

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A legal entity that is separate and distinct from its owners, offering limited liability to its shareholders.

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Stock

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A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.

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Stockholders

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Individuals or entities that own shares in a corporation, making them partial owners of the company.

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Franchise

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A type of license that a party (franchisee) acquires to allow them to have access to a business's (franchisor) proprietary knowledge, processes, and trademarks.

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Franchisor

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The company that allows an individual (franchisee) to run a location of their business.

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Franchisee

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An individual or company that holds a franchise for the operation of a business.