Chapter 4

• Sole trader: a business that is owned and controlled by just one person who takes all the risks and receives all the profit.
• Start-up capital: The finance needed when first setting up a business.
• Partnership: a business formed by two or more people who will usually share responsibilities for the day-to-day running of the business. Partners usually invest capital in the business and will share profits.
• Unincorporated business: a business that does not have legal identity separate from its owners. The owners have unlimited liability for business debts.
• Unlimited liability: if an unincorporated business fails, the owners will have to use their personal wealth to finance any business debts.
• Shareholder: a person who owns shares in a limited company.
• Private limited company: often a small to medium-sized company; owned by shareholders who have limited liability. the company cannot sell its shares to the general public.
• Public limited company: often a large company; owned by shareholders who have limited liability. The company can sell its shares to the general public.
• Ordinary shareholders: The owner's of a limited company.
• Limited liability: The shareholders in a limited liability company that fails, only risk losing what they have invested in the business and not any of their personal wealth.
• Dividend: a payment out of profit to shareholders as a reward for their investment.
• Collateral: non-current assets offered as security against borrowing.
• Franchise: a business system where the entrepreneur buys the right to use the name, logo and product of an existing business.
• Joint venture: two or more businesses agree to work together on a project and set up a separate business for this purpose.
• Public corporation: a business organization that is owned and controlled by the government.