Business Law Terms and Definitions

Financial Statements Statements concerning the business's financial status. These include: income statement, balance sheet, and cash flow statements, and may include other statements appropriate for your business. Controllable expenses Those costs that can be managed by the owner and either incurred or not, depending on the owner's needs. Collateral Assets pledged by the borrower to get a loan. Accounting Method Any number of approaches for calculating the income of an entity. Usually applied to the general means of recognizing income and expenses, e.g., cash or accrual. But it can also apply to method of keeping inventories, etc. Cash disbursements Cash disbursements money paid out by the business owner for goods and services received. Equity Business owners investment in the company. Venture Venture undertaking of a business that involves some speculation or risk. Capital equipment Equipment used as part of your business that is not sold in the normal course of the business. Articles of Incorporation Legal document filed with the state, which sets forth the purposes and regulations for a corporation. Each state may have different rules/requirements. Cash flow Measure of how well a business manages its inflows and outflows of cash for a given period of time. It shows the borrower's ability to repay the loan.

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	Did You Know?
	The Franchisor Be Taken To Court In The Franchisee's Home State That depends on your state's law and, if consistent with state law, the franchise agreement. Many franchise agreements provide that all disputes must be settled out of court in arbitration, precluding any lawsuits, unless your state's law does not permit that type of provision.