Unit 3 Types of Business Organisations

4. A legal requirement for all public limited companies. Shareholders may attend and vote on who they want to be on the Board of Directors for the coming year.
6. A business based upon the use of the brand name, promotional logo and product ideas of an existing successful business.
7. Businesses owned by shareholders but, unlike private limited companies, they can sell shares to the public. Their shares are traded on stock exchanges.
10. The liability of shareholders in a company is limited to only the amount of money they invested.
12. Where two or more businesses start a new project together, sharing capital, risks and profits.
13. The original business that sells the right to a franchisee to use its name and idea. The franchisor sells the right to open stores and sell products or services using its brand name.
15. A business that has social objectives as well as an aim to make a profit to reinvest back into the business.
16. Formed when two or more people agree to jointly own a business.
17. The written and legal agreement between business partners. It is not essential for partners to have such an agreement but it is always recommended.

1. One that does not have a separate legal identity to the owners of the business.
2. The owners of a limited company. They buy shares that represent part-ownership of a company.
3. The owners of a business can be held responsible for the debts of the business they own. Their liability is not limited to the investment they made in the business.
5. Companies that have separate legal status from their owners.
8. Payments made to shareholders from the profits (after tax) of a company. They are the return to shareholders for investing in the company.
9. Businesses owned by shareholders but they cannot sell shares to the public – only to family, friends or specialist business investors.
11. A business owned and controlled by one person.
14. A person who buys the licence to operate an outlet of an existing business from the franchisor.