Chapter 2: Business structure Flashcards
chapter covers syllabus section 1.2 AS level terms and definitions
private limited company
a business that is owned by shareholders who are often members of the same family; this company cannot sell shares to the public
initial public offering (IPO)
an offer to the public to buy shares in a public limited company
public limited company (PLC)
a company whose shares are traded on a stock exchange and can be bought and sold by the public
primary sector business activity
firms engaging in farming, fishing, oil extraction and all other industries that extract natural resources so that they can be used and processed
secondary sector business activity
firms that manufacture and process products from natural resources , including computers, brewing, baking, clothes-making and construction
tertiary sector business activity
firms providing services to consumers and other businesses, such as retailing, transport, insurance, banking, hotels and tourism
quaternary sector business activity
businesses providing information services, such as computing, web design, ICT, management consultancy and R&D
public sector
organisations accountable to and controlled by central or local government (the state)
private sector
businesses owned and controlled by individuals or groups of individuals
mixed economy
economic resources are owned and controlled by both private and public sectors
free-market economy
economic resources are owned largely by the private sector with very little state intervention
command economy
economic resources are owned, planned and controlled by the state
public corporation
a business enterprise owned and controlled by the state - also known as a nationalised industry
sole trader
a business in which one person provides the permanent finance and, in return, has full control of the business and is able to keep all the profits
unlimited liability
business owners have full legal responsibility for the debts of the business
partnership
a business formed by two or more people to carry on a business together, with shared capital investment and, usually, shared responsibilities
limited liability
the only liability - or potential loss - a shareholder has, if the company fails, is the amount invested in the company, not the total wealth of the shareholder
share
a certificate confirming part-ownership of a company and entitling the shareholder owner to dividends and certain shareholder rights
shareholder
a person or institution owning shares in a limited company
Memorandum of Association
this states the name of the company, the address of the head office through which it can be contacted, the maximum share capital for which the company seeks authorisation and the declared aims of the business
Articles of Assocation
this document covers the internal workings and control of the business, the names of directors and the procedures to be followed at meetings
cooperative
a jointly owned business operated by members for their mutual benefit, to produce or distribute goods or services - as in consumers’ cooperatives or farmers’ cooperatives
franchise
the legal right to use the name, logo and trading systems of an existing successful business
franchiser
a person or business that sells the right to open stores and sell products or services, using the brand name and brand identity
franchisee
a person or business that buys the right from the franchiser to operate the franchise
joint venture
two or more businesses agree to work closely together on a particular project and create a separate business division to do so
social enterprise
a business with mainly social objectives that re-invests most of its profits into benefiting society rather than maximising returns to owners
