Types of Business Organisation Flashcards
Sole Trader
Is a business owned by one person.
Limited Liability
Limited liability protects owners from losing personal assets; they only risk what they invested..
Unlimited Liability
Unlimited liability means owners are fully responsible for business debts, risking personal assets.
Partnership
Is a form of business in which two or more people agree to jointly own a business.
Unincorporated Business
is one that has no separate legal identity from its owner(s), meaning they have unlimited liability for debts. Examples include sole proprietorships and partnerships.
Incorporated Business
An incorporated business is a legally separate entity from its owners, meaning they have limited liability for debts. Examples include private and public limited companies.
Shareholders
Are the owners of a limited company. They buy shares which represent part- ownership of the company.
Private Limited Companies
A private limited company (Ltd) is a business owned by shareholders with limited liability. Its shares cannot be sold to the public and are usually held by family or close associates.
Public Limited Company
A public limited company (PLC) is a business with limited liability whose shares are traded on the stock exchange, allowing the public to invest.
Dividends
Dividends are profits paid to shareholders as a reward for investing in a company.
Franchise
A franchise is a business model where a franchisor (owner of a brand) allows a franchisee to operate under its name in exchange for fees and royalties.
Joint Venture
A joint venture is a business agreement where two or more companies collaborate on a project while remaining separate entities.
Public Corporation
A public corporation is a government-owned business that provides essential services to the public, like transport or utilities.
