Keyword
Definition
Sole trader
A business that is owned and run by just one person though it may employ staff. It is an unincorporated business in which the owner has unlimited liability for all the debts of the business.
Unincorporated business
A business that does not possess a separate legal identity from its owner.
Unlimited liability
The owner is fully responsible for all debt. The owner is liable for all the debts of the business and stands to lose his/her investment as well as personal assets if the business goes into debt.
Partnership
A business that is owned by two or more people, known as the partners. This sort of a business organisation is unincorporated and so the partners have unlimited liability.
Incorporated business
Businesses that are a separate legal entity from their owners.
Shareholders
A limited company is owned by its shareholders who own a share of the company.
Limited liability
The shareholders have a limited liability, which means they are not fully liable for the debts of the business.
Co-operative
This type of business organisation is owned and managed by people who use its services and who work there.
Franchise
This is a form of business organisation in which a business (franchisor) grants another business (franchisee) the right to use its name, logo and sell its products in return for a fee and/or royalty.
Franchisee
The business that is granted the right to use the name, logo and sell the products of another business (franchisor).
Franchisor
The business that grants another business (franchisee) the right to use its name, logo and sell its products.
Social enterprise
A business that is set up for a social purpose and not to make profits for its owners.
Not-for-profit enterprise
An enterprise that is set up for a social purpose and not to make profits for its owners.
Charity
A not-for-profit organisation set up to raise funds for a cause.
