the owners of the business are held responsible for the debts of the business, meaning their personal assets are at risk.
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limited liability
the only liability, or potential loss, a shareholder has if the company fails is the amount invested in the company, not the total wealth of the shareholders.
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sole trader
a business in which one person provides the permanent finance and, in return, has full control of the business and is able to keep all of the profits
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parntership
a business formed by two or more people to carry on a business together, with shared capital investment and, usually, shared responsibility. Partners are bound by the terms of the Partnership Act 1890.
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sleeping partner
a partner who usually supplies the business with capital, however they do not have an active role in running the business. These have limited liability.
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deed of partnership
provides agreement issues, such as voting rights, the distribution of profits, the management role of each partner and who has the authority to sign contracts.
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share
a certificate confirming part ownership of a company and entitling the shareholder owner to dividends and certain shareholder rights
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shareholder
a person or institution owning shares in a limited company
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limited companies
incorporated business with limited liability, a separate legal personality and continuity of a business. In setting up, these must register with the Registrar of Companies at Companies House.
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articles pf association
Details the internal workings of the business and control of the business
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private limited companies
an incorporated business that is owned by shareholders but does not have the legal right to offer shares for sale to the public
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public limited companies
an incorporated business that has the legal right to offer shares for sale to the public. Shares of these companies are listed on the Stock Exchange
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seperate legal identity
the company is recognised in law as having a legal identity separate from that of its owners
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cooperatives
business organisations owned and controlled by a group of people to undertake an economic activity for mutual benefit.
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consumer cooperatives
members buy goods in bulk, sell them, and divide the profits between members
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worker cooperatives
workers buy the business and run it; decisions and profits are shared by the members.
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producer cooperatives
producers organise distribution and sale of products themselves
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franchises
a business that uses the name, logo and trading systems of an existing successful business; based upon the purchase of a franchise licenser from the franchiser. Franchise businesses have a lower failure rate than non-franchise firms.
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joint venture
where two or more businesses agree to work closely together on a particular project and create a separate business division to do so.
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holding companies
a business organisation that owns and controls a number of separate businesses, but does not unite them into one unified company. They often have separate businesses in different markets altogether. The holding company has diversified interests
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public corporations
businesses enterprise owned and controlled by the state. They often do not have profit as a main objective.
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family owned business
businesses actively owned and managed by at least two members of the same family
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stakeholders
individuals or groups that have a direct interest in the activities of a business. Stakeholders can influence what a business does, and as they will be affected by the business, they will try to get the business to do what they want.
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stakeholder theory
the view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders
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Other cards in this set
Card 2
Front
the only liability, or potential loss, a shareholder has if the company fails is the amount invested in the company, not the total wealth of the shareholders.
Back
limited liability
Card 3
Front
a business in which one person provides the permanent finance and, in return, has full control of the business and is able to keep all of the profits
Back
Card 4
Front
a business formed by two or more people to carry on a business together, with shared capital investment and, usually, shared responsibility. Partners are bound by the terms of the Partnership Act 1890.
Back
Card 5
Front
a partner who usually supplies the business with capital, however they do not have an active role in running the business. These have limited liability.
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