1.4_Flash cards

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Sole Trader

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The only owner of a business which has unlimited liability

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Partnership

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A business owned by 2 to 20 partners which has unlimited liability

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Private Limited Company (Ltd)

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A business whose shareholders have limited liability. Shares can only be sold to friends and family

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Public Limited Company (PLC)

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A large business whose shareholders have limited liability. Shares are sold on the stock exchange to anybody.

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Franchise

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The right given by one business to another to sell goods or services using its name

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Franchisee

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A business that agrees to manufacture, distribute or provide a branded product, under license by a franchisor.

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Franchisor

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The business that gives franchisees the right to sell its product, in return for a fixed sum of money or a royalty payment.

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Unlimited liability

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A legal obligation on the owner of a business to pay off all debts of the business. In law, there is no distinction between what the business owes and owns and what the owner owes and owns.

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Limited liability

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When shareholders of a company are not personally liable for the debts of the company: the most they can lose is the value of their investment in the shares of the company.

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Fixed Premises

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Where a business has a physical location, e.g. shop, market stall.