Legal Structures Flashcards
Def. of Unincorporated business:
there is no distinction in law between the individual owner and the business itself
Def. of Incorporated business:
this has a legal identity that is separate from the individual owners
Def. of Unlimited liability:
a situation in which the owners of a business are liable for all the debts that the business may incur
Def. of Limited liability:
a situation in which the liability of the owners of a business is limited to the fully paid-up value of the share capital.
Def. of Sole trader:
a business owned by one person. The owner may operate on his or her own or may employ other people
Types of Legal Structure: (give 3)
- Sole trader
- Partnership
- Private limited company
Def. of Partnership:
a form of business in which two or more people operate for the common goal of making a profit
Def. of Private limited company
a small to medium-sized business that is usually run by the family or the small group of individuals who own it
Def. of Public limited company
a business with limited liability; a share capital of over 50K; at least 2 shareholders, two directors, a qualified company secretary, and usually a wide spread of shareholders. (plc after the company name
Def. of Ownership:
providing finance and therefore taking risks
Def. of Control:
managing the organisation and making decisions
Def. of Stakeholders:
any group of individuals with an interest in a business. This includes employees, customers, shareholders and the local community
