Chapter 3

Person who takes risks and sets up businesses; individual who organises other factors of production and risks their own money in a business venture

Business owned by a single person

Business owned by or between 2 and 20 partners

Business owner is only liable for the original amount of money invested in the business; shareholders are legally responsible for debts

Owner of a business is personally liable for all business debts and personal assets can be taken to pay debt

This is when a business allows permission for a license to trade their brand

This is the person who is licensed to own and operate the franchise brand name

This is the original business owner that sells the license to grow the brand

A business that aims to improve human or environmental well-being, e.g. charities

This refers to the legal and financial control over a business

A legally binding document that states the formal rights of all partners involved

The business has a separate legal identity from the business

There is not legal difference between the owner and the business

Partners have entered into an agreement; certain actions are now either required or you will be breaking the law