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Flashcards in Business organizations Deck (26)
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1

Alternative director

A person appointed to replace the director when he is unable to attend

2

Types of directors (5)

1. Executive director
2. Non-executive director
3. Chair of the board
4. Alternative director
5. Shadow director

3

Executive director

The individual in charge of the day-to-day running of the company

4

Private company

- it cannot raise money by issuing shares/debentures at large
- No minimum requirement of share capital
- Can have limited liability

5

Sole trader advantages (3)

1. Own boss
2. No specific legal formalities
3. No size limit nor employee limit

6

Sole trader disadvantage

You are personally liable because the company is not a separate legal entity

7

Limited partnership vs. General partnership

A general partnership must have at least two general partners.
A limited partnership must have at least one GP and at least one limited partner.

8

Limited partner

A partner in a company or venture whose liability towards its debts is legally limited to the extent of their investment.

9

General partner

A general partner has responsibility for the actions of the business, can legally bind the business and is personally liable for all the business's debts and obligations.

10

Public company
--> conditions (3)

- A company that may raise capital through the issuance of shares/debentures
- The company must have a minimum share capital of 45'000 Euros
- The company must have limited liability

11

Chairman of the board

The highest ranking in a firm's board that might not actually have the executive authority

12

Authorized capital

It is the nominal value of shares that MAY be issued independent of how many HAVE BEEN issued

13

Issued capital

A part of the authorized capital;
The amount that has SO FAR BEEN ISSUED

14

Types of shares (2)

1. Ordinary shares
2. Preference shares

15

Ordinary shares

Dividends depend on the company's financial position

16

Preference shares

The company has to pay dividends at a fixed rate and pay out before the owners of ordinary shares

17

Management in a Partnership

All partners are entitled to participate

18

Profits in a Partnership

Equal share unless sgreed otherwise

19

Legal status of a Partnership

Not a separate legal entity

20

Taxes in a Partnership

Partners pay income tax dependent on profit division

21

How to Raise capital in a partnership

The partners can borrow but not issue shares/debentures

22

Types of partnerships (3)

1. General partnerships
2. Limited partnerships
3. Limited liability partnerships

23

Types of business structures (2)

1. Unincorporated
- Sole Trader
- Partnerships
2. Incorporated
- Registered company
- Corporation

24

Non-executive directors

Directors that are not concerned with the everyday running of the company. They are, however, brought in for experience and have more to say

25

Important company registration documents (3)

1. Memorandum of association
2. Registration form
3. Articles of association

26

Registered company (corporation)
- Legal status
- Taxes
- Raise capital
- Profits

- Separate entity
- The company pays a corporation tax
- it may issue shares/debentures to raise capital
- The owners earn money depending on the % ownership