understanding business activity, 4 types of business organisation Flashcards
sole trader
a business that is owned and controlled by just one person who takes all the risks and receives all of the profits
start-up capital
the finance needed when first setting up a business
partnership
a business formed by two or more people who will usually share responsibility for the day-to-day running of the business. partners usually invest capital in the business and will share profits
unincorporated business
a business that does not have legal identity separate from its owners. the owners have unlimited liability for business debts
unlimited liability
if an unincorporated business fails, than the owners might have to use their own personal wealth to finance any business debts
shareholder
a person or organisation who owns shares in a limited company
private limited company
often a small to medium-sized company;owned by share holders who have limited liability.the company cannot sell its shares to the general public
public limited company
often a large company, owned by sharholders who have limited liabilty. the company can sell its shares to the general public
ordinary shareholders
the owners of a limited company
limited liability
the shareholders in a limited liability company which fails only risk losing the amount they have invested in the company and not any of their personal wealth
dividend
a payment, out of profit, to shareholders as a reward for their investment
collateral
non-current assets offered as a security against borroqing
franchise
a business system where entrepreneurs buy the right to use the name,logo and product of an existing business
joint ventures
two or more businesses agree o work together on a project set up to a seperate business for this purpose
public corporation
a business organisation that is owned and controlled by the state
