1.4 Definitions Flashcards
Limited Liability-definition
If a business goes bankrupt the owners can only lose what they have invested.
Assets-definition
Things that are owned such as houses or cars
Incorporated-definition
A business that is registered as a company, so the business and owners are seen as separate in the eyes of the law.
Unlimited Liability-definition
If the business goes bankrupt the owners own personal assets can be taken to pay the debts of the business. The owner and the business are seen as the same in the eyes of the law.
Franchisor-definition
An established business that gives permission to an entrepreneur to trade using its name and products.
Franchisee-definition
An entrepreneur who pays a fee to trade using the name and products of an established business.
Franchise-definition
When one business gives another business permission to trade using its name and products in return for a fee and share of its profits.
Sole Trader-definition
A type of unincorporated business owned by one person
Partnership-definition
A business that is owned by a group of two or more people who share the financial risk, the decision making and the profits.
Private Limited Company (LTD)-definition
An incorporated business owned by shareholders.
