Business ownership and location Flashcards
What is a sole trader?
A business with unlimited liability, owned and run by one person
What is a partnership?
A business with unlimited liability, owned and run by two or more people
Define limited liability
When liability is limited to the amount a shareholder invested
What is liability
The responsibility of the owner for the debts of the business
Define a private limited company (PLC)
A company with limited liability and private shareholders
Define a public limited company
A company with limited liability and shares quoted on stock exchange available for public to buy
What is internal and external growth?
Internal - expanding the business within
External - a business grows by joining another business
Define integration
When two businesses join together
What is a merger?
Two businesses agreeing to join together
What is a takeover?
When one business buys out the other business
Define franchise
Expansion through selling the right to use a successful business model
What is a holding company?
A company that holds all or most of the shares in other companies
What is an operating company?
A company that produces and trades
What is a subsidiary?
A business that is owned by a holding company
Define infrastructure
The ‘web’ of services that support an economy
What is bulk-increasing and bulk-decreasing?
Bulk-increasing - goods get bigger or bulkier once processed becoming harder to transport
Bulk-decreasing - good become easier to transport once processed
Define nationalisation
The process of taking business into public ownership
Define privatisation
The process of selling business to the private sector
What are economic charges?
Charges for fair use of a product
