business key terms Flashcards
sole trader
a business run by an individual
LTD
a business where shares are bought/sold privately
PLC
a business where shares can be bought/sold on the stock exchange
unincorporated business
liability falls on shareholders rather than business itself (usually sole traders/partnerships)
incorporated business
liability falls on business not shareholders (usually LTDs/PLCs)
limited liability
means shareholders have no responsibility over business debt
unlimited liability
means shareholder assets can be seized to pay off debts
shareholders
people who invested to own a percentage of the business - gain/lose money when stocks rise/fall and may be paid dividends
dividends
payments may be made from the business to shareholders if it has made a profit
drawings
money/assets withdrawn from a business
articles of association
set out the powers and responsibilities of the directors and members of a business
memorandums of association
documents that set up and govern a business - also sets out how business is run, governed and owned
divorce of ownership and control
where business owners don’t control day-to-day running of a business
stock exchange
where shares in PLCs can be bought and sold freely
stakeholders
anyone who has an interest in the business’s success - not exclusively shareholders
franchise
sells business format (licensing and products) to entrepreneurs - heavy involvement in each outlet
co-operative
group coming together for joint cause (e.g. to provide employment or products when other businesses couldn’t)
social enterprise
business set up to primarily solve a social objective
market capitalisation
total value of all issued shares (share price * no. shares issued)
ordinary share capital
amount of money raised from issues of common shares to public
annual general meeting (AGM)
meeting where shareholders question managers and directors about the business
registrar of companies
where you can find documents and registrations for a business
PESTLE
political, economic, social, technological, legal, environmental (factors which affect businesses)
interest rate
the proportion of a loan paid by the borrower to the lender
