Choosing the Right Legal Structure for the Business

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Flashcards by katie.swift.ks, updated more than 1 year ago
katie.swift.ks
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A Levels Business Studies Flashcards on Choosing the Right Legal Structure for the Business, created by katie.swift.ks on 12/15/2013.
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Question Answer
Unincorporated Business No distinction in the law between the owner and the business itself. E.g. sole traders or partnerships.
Incorporated Business The business and owner have separate identities in the law. E.g. private or public limited.
Unlimited Liability A situation in which owners of a business are liable for all the debts that the business may incur.
Limited Liability A situation in which the liability of owners of a business is limited to the fully paid-up value of the share capital.
Sole Trader A business owned by one person. Can operate on their own or they may choose to employ people.
Partnership A form of business in which 2 or more people operate for a common goal of making a profit.
Private Limited Company A small to medium-sized business that is usually run by family or a small group of individuals who own it.
Public Limited Company A business with limited liability, a share capital over £50,000 with at least 2 shareholders, 2 directors, a qualified company secretary and a wide spread of shareholders. It has plc after its name.
Ownership Providing fiance and therefore taking risks.
Control Managing the organisation and making decisions.
Stakeholders Any group of individuals with an interest in the business. This includes employees, customers and the local community.
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