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...
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- Spring '05