Chapter 4 Types of Business Organisation Flashcards
(33 cards)
What is a Sole Trader?
A sole trader is a business owned by one person.
What does Limited Liability mean?
Limited liability means that the liability of shareholders in a company is limited to only the amount they invested.
What does Unlimited Liability mean?
Unlimited liability means that the owners of a business can be held responsible for the debts of the business they own.
What is a Partnership?
A partnership is a form of business in which two or more people agree to jointly own a business.
What is a Partnership Agreement?
A partnership agreement is the written and legal agreement between business partners.
What is an Unincorporated Business?
An unincorporated business is one that does not have a separate legal identity.
What are Incorporated Businesses?
Incorporated businesses are companies that have separate legal status from their owners.
Who are Shareholders?
Shareholders are the owners of a limited company who buy shares representing part-ownership of the company.
What are Private Limited Companies?
Private limited companies are businesses owned by shareholders but cannot sell shares to the public.
What are Public Limited Companies?
Public limited companies are businesses owned by shareholders that can sell shares to the public.
What is an Annual General Meeting?
An Annual General Meeting is a legal requirement for all companies where shareholders may attend and vote.
What are Dividends?
Dividends are payments made to shareholders from the profits of a company.
What is a Franchise?
A franchise is a business based upon the use of the brand names and trading methods of an existing successful business.
What is a Joint Venture?
A joint venture is where two or more businesses start a new project together, sharing capital, risks, and profits.
What is a Public Corporation?
A public corporation is a business in the public sector that is owned and controlled by the state.
What are the advantages of a Sole Trader?
Advantages include ease of setup, complete control, and keeping all profits.
What are the limitations of a Sole Trader?
Limitations include unlimited liability, limited sources of capital, and no one to share the workload.
What are the advantages of a Partnership?
Advantages include access to more capital, expertise from multiple partners, and shared workload.
What are the limitations of a Partnership?
Limitations include unlimited liability, potential conflicts, and shared profits.
What are Private Limited Companies?
Private limited companies are businesses that sell shares to raise finance but cannot sell shares to the public.
What are the advantages of a Private Limited Company?
Advantages include the ability to sell shares, limited liability, and control.
What are the limitations of a Private Limited Company?
Limitations include significant legal matters and less secrecy in accounts.
What are Public Limited Companies?
Public limited companies sell shares to the public through the stock exchange.
What are the advantages of a Public Limited Company?
Advantages include limited liability, separate legal identity, and the ability to raise large capital.
