AQA Business Unit 1 Ch 7,8,9,10.

Revison

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  • Created by: Daniel
  • Created on: 02-05-10 19:47

Choosing the right legal structure for the busines

The defininitions you need to know...


Unincorporated business:
there is no distinction in law between the individual owner and the business itself. Such businesses include sole traders and partnerships.

Incorporated business: this has a legal identity that is separate from the individual owners. Such businesses include private limited companies and public limited companies.

Unlimited liability: a situation in which the owners of a business are liable for all the debts that the business may incur.

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.

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Ownership, control and stakeholders.


Ownership:
providing finance and therefore taking risks.

Control: managing the organisation and making decisions.


Stakeholders:
any groups of individuals with an interest in a business. This includes employess and shareholders.

Conclusion

A number of factors affect the choice of legal structure. These include

  • The need for finance to expand
  • The size of the business
  • The level of risk involved
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Comments

bilal

please use bigger fonts and wheres the rest of it? thanks

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