Business Terminology

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sole trader

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A business owned (and operated) by one person.

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partnership

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A business owned by two or more people who share its risks and rewards.

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private limited company

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An incorporated business with a minimum of one shareholder, and a maximum of 50 non-employee shareholders, and whose shares are offered only to those people whom the business wishes to have as part owners - is not listed on the ASX.

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public listed company

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An incorporated business with a minimum of one shareholder (and no maximum), and whose shares are freely traded on the Australian Securities Exchange.

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unlimited liability

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The legal obligation that the business owner has through his or her personal responsibility for all the debts of his or her business.

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limited liability

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The condition by which shareholders in a company cannot be held personally responsible for the debts of that business.

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incorporation

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The process that businesses go through to become a registered company and a separate legal entity.

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shareholder

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Any person who owns shares in a company.

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government business enterprise

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A type of business that is government owned and operated; GBEs seek to run profitably while they carry out government policies and deliver community services.

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social enterprise

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A business with the objective of fulfilling a social need.