Unit 3

• Cost of goods sold-direct costs of production or provision of a service
• Proprietorship - Business venture owned by an individual who is personally liable for the venture’s liabilities
• Unlimited liability - Personal obligation to pay a venture’s liabilities not covered by the venture’s assets
• Partnership - Business venture owned by two or more individuals who are jointly and personally liable for the venture’s liabilities
• Joint liability - Legal action treats all partners equally as a group
• Joint and several liability - Allows subsets of partners to be the object of legal action related to the partnership
• Limited partnership - Limits limited partner liabilities in a partnership to the amount of their equity capital contribution to the partnership
• Corporation - A legal entity that separates personal assets of the owners (shareholders) from the assets of the business
• Limited liability - Creditors can seize the corporation’s assets but have no recourse against the shareholders’ personal assets
• Corporate charter - Legal document that establishes the corporation
• Limited liability company (LLC) -
• Intellectual Property (IP) is a term used to describe the rights that are granted to the creator of an original work.
• Patents - A legal document that gives the inventor the exclusive right to make, use, and sell the invention for a set period of time
• Trade secrets - information that is not generally known to the public and is not available to the public.
• Trademarks - A sign that distinguishes the goods or services of one seller from those of another
• Copyrights - protects the originality of the work and the author's right to control the use of their work
• Confidential disclosure agreements are used to protect the discloser from liability for disclosing information to the company
• Employment contracts are legally binding agreements between employers and employees.
• Financial bootstrapping is the process of using the cash generated by the business to finance the business