This preview shows page 1. Sign up to view the full content.
Unformatted text preview: Industry a group of firms that produces similar products 3 FORMS OF BUSINESSES Sole proprietorship business owned by 1 person Partnership 2 or more people that own and operate a business together Corporation legal creation that acquires resources, own assets, produces and sells products, etc. Corporation is distinct from the investors that own it. Can issue stocks o 2 types: Common stock owning part of company and being distributed share of profits o Corporate stock simply lends money to company to be paid back with interest Corporation provides limited liability if you sue the company the individuals who own it are not personally responsible Principle agent problem competing interests between stockholders and the people who work in the company competing interests...
View Full Document
- Spring '05