Business mediums Flashcards
What is separate legal personality?
As long as a company is legally incorporated, it must be treated like any other independent person with rights and liabiltiies.
What is limited liability?
Where shareholders and directors are legally responsible for the debts only up to the value of their shares.
What are the key characteristics of a a sole trader?
Profits
Debts
An individual will own the business and benefit from any profits.
They are personally liable for all the debts of the business.
What are the key characteristics of a general partnership?
Definition
Management
Profits/debts
Two or more persons running and owning a business with the view of a profit.
They may customise their rules via a Partnership Agreement.
Partners keep all profits and incur any losses jointly and severally.
What are the characteristics of a private limited company?
Limited liability
Separate legal personality
Governed by the Companies Act 2006
Owners = shareholders
Managers = directors
What are the characteristics of a Limited Liability Partnership?
Hybrid between general partnerships and companies.
Owned and run by partners but taxed in the same way as companies
Limited liability
Separate legal personality
What are the characteristics of a public limited company?
Limited liability
Separate legal personality
Governed by Companies Act 2006
Have the ability to offer their shares to the public
