Chapter 3

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AO1 - Key term vocab

Draggable item		Corresponding Item
Legally binding		Person who takes risks and sets up businesses; individual who organises other factors of production and risks their own money in a business venture
Partnership		Business owned by a single person
Entrepreneur		Business owned by or between 2 and 20 partners
Incorporated		Business owner is only liable for the original amount of money invested in the business; shareholders are legally responsible for debts
Limited liability		Owner of a business is personally liable for all business debts and personal assets can be taken to pay debt
Unincorporated		This is when a business allows permission for a license to trade their brand
Social enterprise		This is the person who is licensed to own and operate the franchise brand name
Franchisor		This is the original business owner that sells the license to grow the brand
Franchise		A business that aims to improve human or environmental well-being, e.g. charities
Deed of partnership		This refers to the legal and financial control over a business
Unlimited liability		A legally binding document that states the formal rights of all partners involved
Sole trader		The business has a separate legal identity from the business
Business ownership		There is not legal difference between the owner and the business
Franchisee		Partners have entered into an agreement; certain actions are now either required or you will be breaking the law