Business Startup Key Words

• The owner is completely responsible for all the debts of the business  -  up to their own personal wealth.

• They may lose their own personal possessions in order to cover outstanding bills.

• Sole traders and parternerships have unlimited liability.

• Shareholders of a company are liable for debts only up to the value of the amount they invested.

• They cannot lose any of their personal wealth.

• LTDs and PLCs have limited liability.

• Must register with 'Registrar of Companies' at company's house.
• Memorandum of Association - Details of the nature, purpose, and structure of the company.
• Articles of Association - Details of the internal rules of the company.
• Certificate of Incorporation - Shows date of 'incorporation' and allows the company to trade.
• Prospectus - before shares can be sold, the company will issue a prospectus which gives details of the company's plans and its hopes for the future.
• Trading Cartificate - Once the company has sold shares and raised enough capital to be able to trade efficiently, a trading certificate will be issued by the registrar.

Stockholder/shareholder:

• Someone who has invested money in a limited company and consequently owns a portion of the business.
• They have limited liability.

Stakeholder:

• Someone who shows interest in a business; they can be either internal or external.
• Stakeholders can be shareholders.
• They don't necessarily have to be employed by the company.