Business Structures and Objectives

Flashcards about business forms and share prices

Sole Trader

One owner of the business who has sole control of the business and does not have to share the profits with anyone else.

Unlimited Liability

A feature of unincorporated businesses (sole traders and most partnerships) where the owners are personally liable for all debts incurred by the business.

Unincorporated Business

A business that does not have a separate legal identity from its owners. Sole traders and most partnerships are unincorporated.

Private Limited Company (Ltd)

A company that is owned by shareholders but they cannot sell their shares to someone else without the agreement of the other shareholders.

Public Limited Company (PLC)

A company is owned by shareholders but its shares can be freely bought and sold on the Stock Exchange.

Limited Liability

A feature of incorporated businesses such as private and public limited companies, which means the owners’ liability is limited to the amount they have invested in the business.

Incorporated Business

A business such as private and public limited companies, which has a separate legal identity from its owners.

Social Enterprise

Businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or community.

Ordinary Share Capital

The most common and the riskiest type of share as there is no guaranteed dividend.

Market Capitalisation

The value of the company determined by multiplying the share price by the number of shares issued.

Dividends

The share of profits paid out by a company to shareholders.

Private sector organisations

Owned, financed and run by private individuals and range from small sole trader businesses to larger multinational corporations.

Public sector organisations

Owned and operated by the government, whether at local, regional or national level.