1.5 Flashcards
(12 cards)
What is an entrepreneur?
A person who spots an opportunity and shows initiative and a willingness to take risks in order to benefit from the potential rewards.
Entrepreneurs are key to innovation and economic growth.
Define intrapreneurship.
Involves people within a business creating or discovering new business opportunities and ideas, leading to the creation of new parts of the business or even a new business.
Intrapreneurs act like entrepreneurs within the confines of an existing organization.
What is a sole trader?
An individual who owns and runs their business. The business is unincorporated and has unlimited liability.
Sole traders are personally responsible for all debts incurred by the business.
What is a partnership?
A group or association of between 2 or more people who agree to own and run a business together. The business is unincorporated and has unlimited liability.
Partnerships allow for shared responsibility and resources.
Define a Private Limited Company (Ltd).
A company in which a number of shareholders contribute funds to the company in return for shares. Shares can only be sold to friends and family NOT on the Stock Exchange. The business is incorporated and has limited liability.
Limited liability means shareholders are not personally liable for the company’s debts.
What is a Public Limited Company (PLC)?
A company in which an unlimited number of shareholders contribute funds to the company in return for shares. Shares can be sold on the Stock Exchange. The business is incorporated and has limited liability.
PLCs can raise capital by selling shares to the public.
What is a franchise?
When one business (the franchisor) gives another business (the franchisee) permission to trade under the franchise name and sell their goods or services.
Franchising allows for brand expansion with reduced risk.
Define a social enterprise.
A business whose motives are not financial gains but to provide a service or benefit to society.
Social enterprises focus on social impact rather than profit maximization.
What are shareholders?
Investors who are part owners of a company. Their liability is limited to the sum invested.
Shareholders benefit from dividends and potential share value increases.
What is opportunity cost?
The next best alternative foregone.
Opportunity cost is a key concept in economics, emphasizing the trade-offs in decision-making.
Define limited liability.
Limited liability means that the shareholders are only liable for the money that they have invested, not the overall debts of the company.
This protects personal assets of shareholders.
What does unlimited liability mean?
Unlimited liability describes the potential risk that sole traders and partnerships face. They are liable for the debts of the business.
This means personal assets can be used to settle business debts.
