1.2 Business structure Definitions Flashcards

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Nationalisation

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The process of transferring ownership of a business or public service from private to state ownership.

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Privatisation

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The transfer of ownership of a business, enterprise, or public service from the government to private individuals or organizations.

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Merit Goods

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Goods or services that are deemed beneficial for individuals and society, which are often under-consumed if left to the free market.

E.g. education, healthcare

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Unlimited Liability

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A legal obligation on the owner of a business to settle all debts incurred by the business, meaning personal assets can be used.

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Company

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A business organisation which has its own legal identity and which has limited liability.

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Shareholders

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Individuals or entities that own shares in a company and are entitled to a portion of the profits.

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Limited Liability

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A legal structure where a company's owners are not personally liable for the company's debts beyond their investment.

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Franchise

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A business model where a company (franchisor) allows individuals (franchisees) to operate a business using its brand and system.