Business Entities & Organizational Structures

Vocabulary flashcards covering key terms, structures, and concepts related to business entities, their features, advantages, and disadvantages.

Public Sector

Organizations owned and run by the government whose primary aim is to provide essential goods and services (e.g., education, healthcare) to the public.

Private Sector

Businesses owned and run by private individuals or organizations that usually aim to earn profit for their owners.

Sole Trader (Sole Proprietor)

An unincorporated business owned and controlled by one person.

Unincorporated Business

A business that is not legally separate from its owner; the owner and the business are the same legal entity.

Unlimited Liability

The legal obligation whereby the owner is personally responsible for all debts of an unincorporated business.

Sole Trader – Advantages

Owner keeps all profits, full autonomy in decision-making, low start-up costs and minimal legal formalities.

Sole Trader – Disadvantages

Unlimited liability, long hours and stress, lack of support when owner is absent or ill.

Partnership

An unincorporated business owned by 2–20 people who share profits, risks, and decision-making.

Partnership – Advantages

Shared workload, combined skills and ideas, greater access to capital through pooled savings or finance.

Partnership – Disadvantages

Shared profits, potential conflict in decision-making, unlimited liability for partners.

Deed of Partnership

A (usually) written agreement setting out partners’ finance contributions, roles, profit-sharing, and procedures for new or departing partners.

Incorporated Business

A company that has a separate legal identity from its owners (shareholders); includes PLCs and LTDs.

Limited Liability

Protection for shareholders of incorporated firms whereby personal assets are not liable for company debts beyond their share investment.

Publicly Held Company (PLC)

An incorporated business that offers its shares to the public on a stock exchange; requires minimum share capital (e.g., €50,000).

Share

A unit of ownership in a company that can be bought or sold; entitles the holder to dividends and voting rights.

Initial Public Offering (IPO)

The first sale of a company’s shares to the public, allowing it to be listed on a stock exchange.

Flotation

The process of ‘floating’ a company on the stock market by selling shares to the public (often via an IPO).

Share Capital

The total value of funds raised by a company through issuing shares to shareholders.

Hostile Takeover

An acquisition in which the bidder gains control of a company by buying more than 50 % of its shares against the wishes of current management.

Private Limited Company (LTD)

An incorporated business that sells shares privately to invited investors (often family/friends) and cannot trade shares on a stock market.

For-Profit Social Enterprise

A business that uses commercial methods to achieve social or environmental goals rather than maximising shareholder profit.

Cooperative

A for-profit social enterprise owned and managed democratically by its members, who share profits and have equal voting rights.

Consumer Cooperative

A cooperative owned by its customers, who buy goods or services collectively for mutual benefit.

Employee Cooperative

A cooperative owned and run by its workers, who share decision-making and profits.

Producer / Agricultural Cooperative

A cooperative where producers (e.g., farmers) pool resources to improve marketing, purchasing, or processing activities.

Non-Governmental Organization (NGO)

A non-profit social enterprise that operates independently of governments to promote social, environmental, or humanitarian causes.