Chapter 1 Vocabulary Flashcards
Company as “Natural persons”
Individuals, can create their own company.
- Sole trader/sole owner or
- Partnerships.
Sole trader/sole owner company
One owner/person (can decides the best legal structure of the company), unilimited liability (liable for the firm’s debt), the owner takes profits, limited access to capital (65% in U.K.) Business = Owner. Small business
Liability
Financially and legally responsible for something
Sole trader advantages
No legal paper required, can invest small amount of money (K), decides by his own, closely connected to employees/customers
Sole trader drawbacks
On his own, responsible for everything, hard-work, unlimited liability if the business fail.
Partnerships company
Natural company:
- Fairly small business owned by 2-20 partners, operates for the common goal of making profit.
- Most unlimited liability.
- Partners takes profits.
- Access to capital usually limited.
- Drawbacks desagreements
Partnerships advantages
Workload and expertise shared, consults partners to make decisions, pull more capital, each partner has total and unlimited personal liability of the debts incurred for partnership (shared responsibility, division of debts between each partners).
Partnerships drawbacks
Can be disputed/conflicted, unlimited liability
Limited/dormant/silent/secret/sleeping partner
Associé passif/commanditaire
Partner who just give $ to have a bigger K but is not involved in the running of the company.
LP - LLP
Limited Partnership - Limited Liability Partnership
SARL
Company as “Juristic persons”
The company exists in itself, has a juristic ID not a separate legal ID, the persons who work for it are not taxed. Can be created by law as legal person > the company can accepts limited liability for civil responsibility and taxation incurred as members perform/fail to discharge their duty within the birth certificate or published policy. May also associate and register as companies “corporate group”
Limited company (corporation US)
Ownership divided into equal parts (shares) owned by shareholders. They have limited liability in regards to what they have invested/guaranteed in the company, are not personally liable for the firm’s debt. LC have their own legal identity/existence.
Incorporated Company (Inc.) / Corporation
Limited company
Private company/unquoted company/unlisted company/close corporation (Ltd. Limited)
Mostly small but some are large businesses owned by NGO or small number (2-7) of shareholders/investors or company members.
- Does not share/trade its company stock to the general public on the stock market exchanges.
- No requirement to disclose the financial information of the company.
- Limited Liability
- Shareholders take profits.
- Access to capital
Public companies PLC
- Large businness owned by shareholders (min 7 no max).
- Shareholders have Limited liabilities and take profits.
- Extensive access to capital. Anybody can buy the shares of this company on the stock exchange.
- Obilgation to publish their account and have certified account.
- May be taken over.
Franchise
- Owner = franchisee.
- Small but often part of a large organization.
Limited liability. - Profits divided between franchisee and franchisor.
- Capital limited by owner’s capital
Corporate governance
- Set of processed customs polices/laws affecting the way a company is directed, administrated or controlled.
- Goals for which the company is governed.
- New concept. A lot to do with the relationship between stakeholders.
Stakeholders
- Shareholders, management, the board etc.
- Employees, customers, creditors, regulators, suppliers, the company at large.
Corporate citizenship
- Include environmental awareness (environmentally friendly) not only business regulation: the way the company relies to the environment, gender quality.
Diversity
Ethnic diversity, gender diversity, percentage of disabled people etc. > pressure : the more is the company diverse, the more efficient it is.
Company
Association/collection of individuals:
- Natural person
- Judicial/legal persons.
Can be create by law as legal person to accept limited liability for civil responsibility and taxation incurred as members perform/fail to discharge their duty within the publicity declared “birth certificate” or published policy. As legal persons > may associate and register themselves as company “corporate group,” corporation (US), incorporated company
The management makes the bext decision, to be accountable for.
Devoir rendre des comptes
The main stakeholders
- Shareholders provides the capital of the company, may approve the major transactions of the company.
- The board of directors elected by the shareholders in order to other see the management of the firm.
- The Senior Executive responsible for the day-to-day operations of the company.
> Problem of allocation of power.
Members of the board of directors
Body of members elected by the shareholders whose responsibilities are detailed in the company’s bylaws. Chaired by a Chairman.
- Inside directors: members of the board, connected to the company, e.g. large shareholders, executive Directors (CEO, COO, CFO “DAF”, marketing manager etc.), union representatives.
- Outside directors: not employed nor connected with the firm.
