Term
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Definition
| An annual general meeting for shareholders to decide on things about the business |
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Term
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Definition
| Private limited company - Have private shareholders (friends and family) limited number of shareholders |
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Term
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Definition
| Public limited company - Have public shareholders, an unlimited amount |
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Term
| 3 similarities between an LTD and PLC |
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Definition
-Continuity
-Shareholders have limited liability
-Legal formalities involved when starting |
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Term
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Definition
-Shareholders have limited liability
-Original owner can keep control
-Greater status than an unincorporated business |
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Term
| 3 disadvantages to an LTD |
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Definition
-Legal formalities when starting
-Capital cannot be raised by the general public
-Difficult for shareholders to sell shares |
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Term
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Definition
-Separate legal identity
-Easy for shareholders to buy/sell shares encouraging investment
-Large amounts of capital available |
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Term
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Definition
-High price for consultants when starting a PLC
-Risk of takeover
-Must release financial information to the general public |
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Term
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Definition
| A form of business in which a firm that already has a successful good or service sells the right to do business under their name |
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Term
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Definition
| The person who buys the right to do business from the franchisor |
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Term
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Definition
| The person who the right to use their business to the franchisee |
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Term
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Definition
| Regular payments to the franchisor for use of the trademark (Usually a % of the profit) |
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Term
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Definition
| Upfront one-off payment to the franchisor for use of the brand name |
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Term
Franchisors:
Name 2 advantages |
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Definition
-Large companies see this as a rapid means of expansion
-If it works you can get a lot of profit by; (Selling the franchise, Royalty, Selling raw materials and equipment) |
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Term
Franchisors:
Name 2 disadvantages |
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Definition
-Do not get all of the profit
-Reputation can become affected |
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Term
Franchisee:
Name 3 advantages |
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Definition
-Franchisor provides support (Training, marketing)
-Benefit from national advertising
-Low chance of failure |
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Term
Franchisee:
Name 3 disadvantages |
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Definition
-Cost to buy franchise
-Have to pay the royalty
-Have to follow franchise model (Set prices, design) |
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Term
| Memorandum of association, what does it contain? |
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Definition
-Name of company
-Address of HQ
-Max share capital |
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Term
| What does the article of association contain? |
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Definition
-Internal workings of the business
-Names of directors
-Control of the business |
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Term
Limited companies:
Type of ownership? |
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Definition
-Incorporated
-Limited liability
-Can sell shares of ownership publically (PLC) or privately (LTD) |
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Term
Limited companies:
Legal formalities? |
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Definition
2 legal documents - Memorandum of association, article of association
-Corporation tax (%percentage of profit) |
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Term
Limited companies:
Type of liability? |
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Definition
-Limited liability
-More likely to get investors as their assets are protected
-Investors lose investment only |
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Term
Limited companies:
Finance? |
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Definition
-Investments from shareholders
-Low cost as/ easy setup for LTD's (opposite for PLC's)
-Dividends (% of the profit) paid to shareholders annually (choice of directors) |
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Term
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Definition
| a jointly owned business operated by members for their mutual benefit, to produce or distribute goods or services - as in consumers cooperative or farmers cooperative. |
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Term
| Joint venture definition? |
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Definition
| Two or more businesses agree to work closely together on a particular project and create a separate business decision to do so. |
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