An understanding of the basic concepts of business ownership and organization is essential to the company research process. The following terms are linked to articles in the Columbia Encyclopedia and other freely accessible web sites.
Forms of Ownership
Corporation A form of ownership in which a separate, legal entity is created. A corporation may sue or be sued, engage in contracts and acquire property. It has a continual life and is not dependent on any on stockholder for maintaining its legal existence. A corporation is owned by stockholders who enjoy the privilege of limited liability. See also non-profit corporations.
International Company Properly called a foreign-owned company, international companies are held publicly or privately by non U.S. owners.
Multinational Corporation A firm doing business across its national borders is considered a multinational enterprise. Some definitions require a percentage of a firm's business activities to be carried on outside its national borders.
Partnership A form of ownership in which two or more partners are involved. Like the sole proprietorship, a partnership arrangement carries unlimited liability for the owners. Limited Partnership is a special form of partnership to limit liability for most of the partners. Under this arrangement, one or more partners are designated as general partners and have unlimited liability for the debts of the firm, while the other partners are designated as limited partners and are only liable for their initial contribution.
Sole Proprietorship A business owned and generally operated by one person. The owner is solely liable for the firms debts.
Subsidiaries A company with 50% or more of its voting stock controlled by another firm known as the parent company.
Related Terms
Annual Report The formal financial statement issued yearly by a corporation. The annual report shows assets, liabilities, earnings -- how the company stood at the close of the business year, how it fared in terms of profit during the year, and other information of interest to shareholders.
SEC The Securities and Exchange Commission, established by Congress to help protect investors. The SEC administers the Securities Act of 1933, which requires detailed financial disclosures before securities may be sold to the public.
These definitions were excerpted from the following resources:
The Irwin Business and Investment Almanac. (Chicago: Irwin Professional Publishing, 1996)
Encyclopedia of Business.(Detroit: Gale Publishing, 1995).
Last updat: 04/2003