6. Types Of Organisation Flashcards
What is unlimited liability?
Where are you put in a certain amount of money into the business and that’s the only amount of money you can lose not personal possessions
What is a deed of partnership and what will this document contain?
A document written to avoid this agreement that shows how the profit will be shared
If there is no deed of partnership how will profits be shared?
Profits are shared equally in a no deed of partnership situation
What are some advantages of a partnership?
More people can contribute financially my money can be raised to start the business
more people can contribute in problem-solving better decisions made
partners can cover for each other if one is on holiday less stressful
workload is shared out evenly partner is going to specialist skills so tasks are done to a high standard
What are some disadvantages of a partnership?
Too many ideas conflict may occur
unlimited liability can lose personal possessions if one person fails
decisions take longer more people who need to be consulted and who are involved
profit shared less money each person
What is meant by the term silent or sleeping partner?
A partner who is not actually sharing in the work of firm
What does it mean when a company becomes incorporated?
Separate legal identity from that of its owners in other words the business can be sued sue or be liquidated
What is a memorandum of association?
Sets out a constitution and gives details about the company
the name of company name
address of company registered office
capital raised
What is an article of Association?
Deals with the internal running of the company
rights of shareholders
procedures for appointing directors
time and frequency of company meetings
What does PLC stand for?
Public limited company
What percentage of shares do you need to have to be in control of a plc?
51%
Where are plc shares are bought and sold?
The stock exchange
What is a franchise?
Where a firm sells the right to use its products brand-name to another business in return for initial fee and a percentage of the revenue earned
What is a franchisor?
The seller of the franchise to the franchisee
What is a franchisee?
The buyer of the franchise the entrepreneur
