Business word definitions

Definitions of business phrases

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  • Created by: kerry
  • Created on: 25-05-12 07:24

Un-incorporated

The owners and the business are legally the same

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Incorporated

The owners and the business are legally seperate

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Unlimited liability

They are personally liable for all debts of the business, (have to use personal savings/ possessions to pay back their business debts)

*Sole traders

*Partners

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Limited liability

The owners (shareholders) are responsible to pay back business debts up to the amount they have invested into the business

e.g If they invest £10,000, they will only lose £10,000 even if business debts are in the millions

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Memorandum of Association

Tells people information about the company

- Company name

- Main business address

- What the business does

- Statement of liability

- Number of shares to be sold

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Articles of Association

The rule book of the Company

- Rules for having shareholder meetings

- List of directors and their jobs

- The voting right of shareholders

- Details of how accounts will be recorded

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