Business Ownership

1.2

What is unlimited liability?

When/ if the business fails, you do not just lose the money you invested into it, your personal possessions could also be used to repay any debt the business may owe.

What is limited liability?

When you only lose the money that you invested. If the business fails, your personal assets are not at risk of being taken.

What are Not-for-profit organisations?

An organisation that isn’t set up to make profit. An example of this is a charity such as the British Heart Foundation.

What is Flotation?

When a Private Limited Company (ltd) becomes a Public Limited Company (plc) and has its shares listed on the stock exchange.

What is a Sole Trader?

An owner that works alone.

What is a partnership?

A partnership is a business that has 2 owners rather than 1.

What is a private limited company?

A company that has private investors investing into the business (friends and/ or family)

What is a public limited company?

A company that has investors from the public coming from/ buying from the stock market.

What factors affect which business type is used?

Size of Business

Type of Business

Lender Requirements

Control

Growth

What is a dividend?

a payment for the investors back if the company chooses to or if it has made profit.