Types of Legal Business Structures

Flashcards covering key terms and definitions related to legal business structures and models.

Sole Trader

A business owned and operated by one person, regarded as the same legal entity as the owner.

Partnership

An unincorporated business structure involving two to twenty partners, with no separate legal entity.

Unlimited Liability

A legal concept where the owner of a business is personally responsible for all debts and obligations of the business.

Incorporation

The process of forming a corporation, which creates a separate legal entity from its owners.

Private Limited Company

A business model where shares are privately held, requiring at least one shareholder and limited to 50 non-employee shareholders.

Public Listed Company

A company whose shares are publicly traded on the stock exchange and must meet specific regulatory requirements.

Business Model

A plan for how a business will operate and generate income, including the operational procedures and target customers.

Franchise

A business agreement in which a person acquires the rights to operate a business under the trademark and business model of an established company.

Natural Resources

Resources that businesses use that come from the natural environment, such as land, water, and raw materials.

Labour Resources

Human resources that provide skills, effort, and knowledge necessary for a business to function.

Capital Resources

Tools and machinery used by a business to produce goods or services.

SWOT Analysis

A strategic planning tool that identifies a business's internal Strengths and Weaknesses, and external Opportunities and Threats.

Corporate Social Responsibility (CSR)

The practice of businesses considering their impact on society, the environment, and economic factors in their operations and decision-making.

Unlimited Liability

The owner is personally responsible for all business debts, which can risk personal assets.

Business Plan

A formal document outlining the business’s goals, the strategy for achieving them, market analysis, and financial forecasts.

Online Business

A business that operates primarily on the internet, often avoiding many costs associated with physical locations.

Bricks and Mortar

A traditional business model involving a physical storefront where transactions occur directly with customers.

Direct-to-Consumer (DTC)

A business model where products are sold directly to consumers, bypassing third-party retailers.

Government Grants

Funds provided by the government to assist businesses in specific projects or operational costs, usually requiring adherence to certain conditions.