Forms of Business Organisations

Comprehensive vocabulary flashcards covering the characteristics, formation, and legal frameworks of Sole Proprietorships, Partnerships, Joint-Stock Companies, and Cooperative Societies based on the lecture transcript.

Sole Proprietorship

A business owned and operated by a single individual, with no legal distinction between the owner and the business, suitable for small-scale operations.

Unlimited Liability

A condition where the business owner is personally liable for all business debts, risking personal assets like savings or property to settle obligations.

Pass-Through Taxation

A tax arrangement where business income is taxed as the owner’s personal income, simplifying compliance for sole proprietorships.

Partnership

A business form where two or more individuals share ownership, profits, and liabilities to achieve a common goal, governed in Uganda by the Partnership Act, 2013.

Partnership Deed

A private written agreement that outlines the roles, profit-sharing ratios, and responsibilities of partners, serving as a governance tool.

Statement of Particulars

A legal requirement for registering a partnership with the URSB, including details like the business name, address, and partner occupations.

Principal-Agent Relationship

A characteristic of partnerships where each partner has the authority to bind the entire partnership through their individual actions or contracts.

Dormant (Sleeping) Partner

A partner who contributes capital and shares in profits but does not take part in daily management and is not publicly known as a partner.

Nominal (Quasi) Partner

A person who does not contribute capital or share in profits but allows their name to be used by the firm to lend credibility, becoming liable to third parties.

Partner by Holding Out

An individual who allows themselves to be presented as a partner, leading third parties to believe they are part of the business and thus making them liable for its debts.

Joint-Stock Company

A legal entity or artificial person created by law, separate from its owners, and regulated under specific legislation like the Companies Act, 2012.

Separate Legal Entity

The legal concept that a company has a distinct identity from its shareholders, allowing it to own assets, borrow capital, and sue or be sued in its own name.

Perpetual Succession

The principle that a company continues to exist indefinitely regardless of changes in shareholders, directors, or the death of its members.

Memorandum of Association (MOA)

A document defining the company's external relationship, including its name, objectives, and the extent of liability of its members.

Articles of Association (AOA)

A document detailing the internal rules and regulations governing a company's management, operations, and the rights of shareholders.

Statutory Corporation

A public enterprise created by a specific Act of Parliament to perform public functions, such as the Uganda National Roads Authority (UNRA).

Private Limited Company (Ltd)

A company with restricted share transfers, typically limited to a maximum of $100$ members, which cannot offer shares to the public.

Public Limited Company (PLC)

A company with no upper limit on the number of shareholders that can offer shares to the public and list on stock exchanges.

Government Company

A business entity in which the government holds at least $51\%$ of the share capital, such as the Uganda National Oil Company (UNOC).

Company Limited by Guarantee

A non-profit entity without share capital where members (guarantors) agree to contribute a fixed nominal amount toward debts in the event of winding up.

Liquidation (Winding Up)

The formal process of dissolving a company by selling its assets to pay off creditors and distributing any surplus to shareholders.

Receivership

A process where a secured creditor appoints a receiver to take control of a company's assets specifically to recover unpaid debts.

Administration

A corporate rescue mechanism aimed at reorganizing an insolvent company to achieve better returns for creditors than liquidation.

Cooperative Society

A member-owned and democratically governed enterprise established to meet shared economic and social needs through pooled resources.

Democratic Member Control

A cooperative principle where each member has one vote regardless of the amount of capital they have contributed.

SACCO

Savings and Credit Cooperative Organizations that provide financial services and loans to members, often in rural or underserved areas.

Uganda Registration Services Bureau (URSB)

The government agency responsible for the registration and regulation of business names, partnerships, and companies in Uganda.