Entrepreneurship and Business Forms

Vocabulary flashcards covering key terms related to entrepreneurs, their roles, and the legal forms businesses can take.

Entrepreneur

A person who sets up a business in the private sector, innovates, organizes resources, makes key decisions, takes risks and seeks profit.

Innovation (Entrepreneurship)

Introducing new ideas, products or processes—often by spotting a gap in the market—to generate revenue.

Gap in the Market

An unmet customer need or demand that can be exploited by a new product or service.

Organization of Factors of Production

The entrepreneur’s role of acquiring and coordinating resources such as materials, labour and equipment to produce goods or services.

Private Sector

The part of the economy owned and operated by individuals and businesses rather than the government.

Risk Taking

The willingness of entrepreneurs to expose their own capital (and possibly more) to loss if the business fails, in pursuit of profit.

Profit

The financial reward an entrepreneur earns when business revenues exceed costs; the return for successful risk taking.

Unincorporated Business

A firm with no legal distinction between the owner and the business; activities occur in the owner’s name and operations are usually small.

Incorporated Business

A company with a separate legal identity from its owners, capable of suing, being sued, taken over or liquidated.

Limited Company

A common form of incorporated business where ownership is divided among shareholders who enjoy limited liability.

Separate Legal Identity

The legal status that allows a business to exist independently of its owners, enabling it to enter contracts in its own name.

Shareholder

An individual or entity that owns shares in a limited company and thereby holds partial ownership.