Business Ownership Flashcards
What is a sole trader
One person that owns the entire business, they also have unlimited liability
What is a partnership
2-20 people working together and sharing profits, They also have unlimited liability
Private Limited Company(Ltd)
A company where the major shareholders can pick and choose who gets to buy the shares. They also have limited liability
Public Limited Company(Plc)
A company where anyone can buy shares in, It is on the stock market. It also has limited liability
What is unlimited liability
Its where the owner and company arent separate identities so all the financial responsibility on the business is also directly on the owner
What is limited liability
Its where the business and the owner are separate financial identites. If the business gets sued or bankrupt, the owners own wealth isnt affected
What are dividends
A sum of money paid regularly by a company to its shareholders out of its profits.
What is a grant
A grant is money given to a business, usually by the government or lottery fund, that does not need to be paid back.
What is a companies house
Any limited company or partnership business has to register with Companies House. These records are public and there is usually a fee to register.
What is a deed of partnership
A document that is signed by all of the owners of a business setting out the terms they must abide by and their obligations as owners.
What are the economies of scale
Where the average costs (of production, distribution and sales) fall as the business increases the amount of product that it produces, distributes and sells.
What is a hostile takeover
A takeover of one company by another that is accomplished without the agreement of the target company’s management. Instead, the acquirer approaches the company’s shareholders directly or fights to replace the management to get the takeover approved.
What is a non-profit organisation
Set up to achieve things other than profits like charity
