Chapter 2

Question 1

Cooperatives

Answer 1

Cooperatives are for-profit social enterprises set up, owned and run by their members, who might be employees and/or customers

Question 2

Company/ corporation

Answer 2

Refers to a limited liability business owned by shareholders. A certificate of incorporation gives the company a separate legal identity from its owners/ shareholders.

Question 3

Deed of partnership

Answer 3

is the legal contract signed by the owners of a partnership. The formal deeds specify the name, responsibilites and proportion of any profits and losses.

Question 4

Incorporation

Answer 4

Legal difference between the owners of a company and the business itself. Ensures owners are protected by limited liability.

Question 5

Initial public offering (IPO)

Answer 5

Occurs when a business sells all or part of its business to shareholders on a public stock exchange for the first time. This changes the legal status of the business to a publicly held company.

Question 6

Limited liability

Answer 6

Is the restriction on the amount of money that owners of a company can lose if the business goes bankrupt, i.e. shareholders cannot lose more than the amount they invested.

Question 7

Non-governmental organizations (NGOs)

Answer 7

Private sector not-for-profit social enterprises that operate for the benefit of others rather than primarily aiming for profit. Eg: Oxfam, Friends of The Earth

Question 8

Partnerships

Answer 8

Type of private sector business entity owned by 2-20 people known as partners. They share the responsibilites and burdens of running and owning the business.

Question 9

Private sector

Answer 9

Part of the economy run by private individuals and businesses rather than the government. Such as sole traders, partnerships, privately held companies and publicly held companies.

Question 10

Privately held company (private limited company)

Answer 10

Business owned by shareholders with limited liability but whose shares cannot be bought by or sold to the general public on a Stock Exchange

Question 11

Publicly held company (public limited company)

Answer 11

Incorporated limited liability business that allows shareholders to buy and sell shares in the company via public Stock Exchange

Question 12

Public sector

Answer 12

Part of the economy controlled by the government. Examples: Healthcare, education, emergency, social housing, natural defence.

Question 13

Sole trader

Answer 13

Self-employed person who runs the business on their own. This means they have exclusive responsibility for its sucess/ profits and failure due to unlimited liability.

Question 14

Social enterprises

Answer 14

Revenue-generating business with social objectives at the core of their operations. They can be for-profit or non-profit business entities, but all profits or supluses must be reinvested for that social purpose rather than be distributed to shareholders/ owners.

Question 15

Stock exchange

Answer 15

Marketplace for trading stocks and shares of publicly held companies.

Question 16

Unlimited liability

Answer 16

Feature of sole traders and ordinary partnerships who are legally liable or responsible for all monies owed to their creditors, even if this means to sell their personal possessions to pay for the debts.