1.2 Type of Business enetities Flashcards
Cooperatives
for profit social enterprises set up, owned and run by their members, who might be employees and/or customers
Corporation
A limited liability business that is owned by shareholders. A certificate of incorporation gives the company a separate legal identity from its owners
Incorporation
legal difference between the owners of a company and the business itself. Ensures the owners are protected by limited liability
Initial Public Offering
business sells all or part of its business to shareholders on a public stock exchange for the first time. Changes the legal status of the business to a publicly held company
Limited liability
restriction on the amount of money that owners of a company can lose if the business goes bankrupt; shareholders cannot lose more than the amount they invested in the company
Non-governmental organizations (NGO)
private sector not-for-profit social enterprises that operate for the benefit of others rather than primarily aiming to earn a profit
Partnership
type of private sector bisiness entity owned by 2-20 people. They share the responsibilities and burdens of running and owning the business
Private sector
part of the economy run by private individuals and business, rather than by the government, such as sole traders, partnerships, privately held companies and publicly held companies
privately held company
busienss owned by shareholders with limited liability but whose shares cannot be bought by or sold to the general public on a stock exchange market
Publicly held company
incorporated limited liability business that allows shareholders to buy and sell shares in the company via a public stock exchange
Public sector
part of the economy controlled by the government (eg. state healthcare and education services
Sole trader
self employed person who runs the business on his/ her own
This person has exclusive responsibility for its success or failure
Social enterprise
are revenue-generating businesses with social objectives at the core of their operations. All profits or sur-pluses must be reinvested for that social purpose rather than being distributed to shareholders and owners
Stock exchange
a marketplace for trading stocks and shares of publicly held companies.
Unlimited liability
A feature of sole traders and ordinary partnerships who are legally liable or responsible for all monies owed to their creditors, even if this means that they have to sell their personal possessions to pay for their debts
