Studied by 4 people
Franchise
A business which has bought the right to trade under an established name.
Franchisee
________ pays for: expansion, shops & license to use the brand name.
Lack of incentive
________ to: increase customer choice & to increase efficiency.
Co operatives
________: groups of people who enter a business & share the benefits.
Liability
the legal debt a company owes to third- party creditors.
joint venture
is when 2 or more businesses agree to start a new project together, sharing the capital, risks & profits.
Memorandum of association
________- ensure statement clause allowing conversion to public limited.
Partnerships
________: owned and controlled by two or more people.
Articles of association
________= A document containing all the regulations that governs the company.
Subsidies
________ lead to inefficiency: managers think that govt are there for bailout & unfair as ________ are not given to private sector.
Shareholders CAN
________ replace directors but it brings bad publicity & loses stability as new directors may be inexperienced & may have contrasting ideas, goals and plans.
Private limited companies
owned, financed & controlled by between 2 & 50 people.
portion of capital
Sharing of losses & profits- split risk based on ________ invested by each partner.
Franchisor
________ makes most decisions → fewer decisions to worry about.
Memorandum of association
________= A document containing all fundamental information which are required for the incorporation of the company.
Partnerships
owned and controlled by two or more people
Private limited companies
owned, financed & controlled by between 2 & 50 people
Public limited companies (PLCs)
owned, financed & controlled by a minimum of 2 shareholders with no maximum number of shareholders
Franchise
A business which has bought the right to trade under an established name
Sole Traders
Owned, controlled & financed by one person
Co-operatives
groups of people who enter a business & share the benefits
Unincorporated
Legally, the owner & the business are the same
Incorporated
The owners & the business have separate legal identities
Liability
the legal debt a company owes to third-party creditors
Sharing of losses & profits
split risk based on portion of capital invested by each partner
More Capital
expansion & growth
Separate legal identity
separate accounts from owner
Denoted by
‘Limited, ‘Ltd or ‘Pty Ltd
Limited liability
less risk
Shares
Existing shareholders only, & transfer needs consent
More ability to raise capital
expand faster
Denoted by
‘PLC, ‘plc or ‘inc
Regulations & control
protect shareholders interest
Lack of privacy
publication of accounts
Expense of shelling shares to the public
specialist bank, merchant bank, prospectus
Memorandum of association
ensure statement clause allowing conversion to public limited
Franchise
A business on the use of the brand names, promotional logos & trading methods of an existing successful business
Franchisee pays for
expansion, shops & license to use the brand name
Subsidies lead to inefficiency
managers think that govt are there for bailout & unfair as subsidies are not given to private sector
Lack of incentive to
increase customer choice & to increase efficiency
^^Corporatization
^^
Franchise
A business based on the use of the brand names, promotional logos & trading methods of an existing successful business.
Public Corporation
Owned by the Government but isn't directly run by them. The state appoints the BOD & gives rgem business objectives to follow
Corporatization
When public corporations run as if they are in the private sector. This is to prepare for 'privatzation'
Board of Directors (BOD)
Directors appointed by shareholders, to run the business. The BOD then appoint managers for day-t--day tasks
Note 
Flashcard (100)