Business Ownership Flashcards
Unincorporated business
Where there is no legal difference between the owner and the business
Incorporated business
Business that has a separate legal identity from its owners
Sole trader
Business owned by a single person
Unlimited liability
Owner of a business is personally liable for all of its debts
Liability
When an owner need to personally pay off business debts using its own personal belongings
Partnership
Business owned between 2-20 people
Deed of partnership
A binding legal document that states the formal rights of partners
Legally binding
An agreement has been made, now certain actions are either required or prohibited by law
Sleeping partner (limited partnership)
Partnership where a person decides to invest in the business but doesn’t take part in any of the activities
Franchise
A structure in which a business owner (franchisor) allows another person (franchisee) to expand their business and manage it in other places under their name
