Legal structure: Sole trader and partnerships

Homework 10/10 Key term test set 3rd October 2013

These will be the key terms to learn for the next topic and will be tested w/c 6th October 2013

1. Sole trader - is an individual that sets up in business on his or her own
2. Partnership - A partnership is formed when two or more people set up in business together.  Typical partnerships include solicitors, accountants, doctors etc.  The largest partnership in the UK is who?
3. Unlimited liability - this occurs when the personal possesions of the owners of the business are at risk if there any problems paying the bills.  There is no limit to the amount of money the owners may have to pay out. 
4. Legal structure - the legal way that a business is set up and operated.  This can be as a slole trader, a partnership, an LTD or a PLC 
5. bancrupt - an entrepreneur who is unable to pay his or her bills.  If this happens receivers will take control of the business and sell off the assets to pay the creditors some of the money owed
6. Assets - property or possessions owned by an entrepreneur or a business e.g. cars, buildings, machinery, land
7. Liability - a sum of money that is owed by a business to another business or an individual.  Liabilities should never be greater than assets or you will be insolvent!
8. Creditor - someone to whom a business owes money, or has given the business credit e.g. supplier, bank, VAT or TAX
9. Risk - a risk is the possibility of something going wrong
10. Uncertainty - An uncertainty is something that we cannot be sure will happen and could be a surprise that the business does not need e.g. recession, 

Good luck and enjoy

Mr T