Business Law Terms and Definitions

Collateral Assets pledged by the borrower to get a loan. Breakeven analysis The point at which the business will neither make a profit nor lose money and where revenues equal expenses. Capital equipment Equipment used as part of your business that is not sold in the normal course of the business. Accounting Procedure Similar to accounting method, but applied to more routine issues. For example, the method of computing depreciation, handling small capital expenditures. Retained earnings Retained earnings earnings kept in the business and not paid out as dividends. Costs Money obligated for goods and services received during a given period of time, regardless of when ordered or whether paid for. Equity Partnership A limited partnership arrangement for providing start-up and seed capital to businesses. Accounts Payable A liability arising when a vendor provides goods or services that are not immediately paid for and where the liability is not formalized in writing but backed by the reputation and credit worthiness of the debtor. I-9, Employment Eligibility Verification Employers are required to have all employees and owners complete a form I-9 as proof of eligibility to work in the U.S. 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.

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	Did You Know?
	Negligence can relate to business activity Negligence is a tort, meaning it is a kind of wrongful act giving rise to a civil court action, usually for damages. Business activity can give rise to negligence in many different ways, for example, through selling defective goods or defective services. To show there has been negligence a plaintiff (someone bringing a case of negligence against a company) must prove the company had a legal duty of care, was in breach