forms of a business Flashcards
What is an unincorporated
The owner is the business-no legal difference
Owner has unlimited liability for business actions
Most unincorporated businesses operate as some traders
What is an incorporated business
There is a legal difference between the business and the owners
The company has a separate legal identity
Owners have limited liability
What is unlimited liability
Business owners is personally responsible for the debts and liability of the business
If the unincorporated business feels the owners are liable for the amount owed
What are advantages of limited liability
Protects the shareholders
Easier to raise finance through the sale of shares and also easier to raise debt
What are some disadvantages of a limited company
Greater administration costs
Public disclosure of company information
Describe not-for-profit organisations
Not-for-profit organisations are businesses that trade in order to benefit the community. These businesses have social aims as well as trying to make money
