The document defines key terms related to small business ownership, large business ownership, business growth, and business structure and organization. For small businesses, it describes sole traders, partnerships, deeds of partnership, sleeping partners, and unlimited liability. For large businesses, it outlines limited companies, memorandums of association, limited liability, private limited companies, public limited companies, boards of directors, dividends, franchises, franchisees, and franchisors. It also defines diversification, horizontal integration, lateral integration, mergers, vertical integration, business plans, chains of command, objectives, organizational structures, SWOT analyses, and startup costs.

1. Business Organisation Key Terms
Small Business Ownership
• Sole Trader: A business owned by one person.
• Partnership: An agreement between 2-20 people to jointly run a business and to share profits and risks.
• Deed of Partnership: This is a legal document which shows how responsibilities, profits and workload are
to be shared.
• Sleeping Partner: A partner who puts in finance but does not take part in running the business.
• Unlimited Liability: Responsibility for the debts of a business extends to the owner’s personal wealth. E.g
their home and possessions could be used to pay off debts.
Large Business Ownership
• Limited Companies: A business structure which has a separate legal identity to its owners known as share-
holders.
• Memorandum of Association: The document which outlines the external information of the company.
• Limited Liability: Responsibility for debt is limited to the amount of money put into a business.
• Private Limited Company (Ltd): A company that is owned by shareholders but shares are not for sale to
the general public.
• Public Limited Company (PLC): company where shares may be sold to the general pub-
lic through the stock exchange.
• Board of Directors: Are appointed by shareholders to decide policy and run the com-
pany.
• Dividend: Payments made to shareholders from the profits of a company.
• Franchise: The right to trade under an established name.
• Franchisee: The person or organisation buying the right to operate a franchise outlet.
• Franchisor: The person or organisation selling the right to operate a franchise.
Business Organisation Key Terms
Small Business Ownership
• Sole Trader: A business owned by one person.
• Partnership: An agreement between 2-20 people to jointly run a business and to share profits and risks.
• Deed of Partnership: This is a legal document which shows how responsibilities, profits and workload are
to be shared.
• Sleeping Partner: A partner who puts in finance but does not take part in running the business.
• Unlimited Liability: Responsibility for the debts of a business extends to the owner’s personal wealth. E.g
their home and possessions could be used to pay off debts.
Large Business Ownership
• Limited Companies: A business structure which has a separate legal identity to its owners known as share-
holders.
• Memorandum of Association: The document which outlines the external information of the company.
• Limited Liability: Responsibility for debt is limited to the amount of money put into a business.
• Private Limited Company (Ltd): A company that is owned by shareholders but shares are not for sale to
the general public.
• Public Limited Company (PLC): company where shares may be sold to the general pub-
lic through the stock exchange.
• Board of Directors: Are appointed by shareholders to decide policy and run the com-
pany.
• Dividend: Payments made to shareholders from the profits of a company.
• Franchise: The right to trade under an established name.
• Franchisee: The person or organisation buying the right to operate a franchise outlet.
• Franchisor: The person or organisation selling the right to operate a franchise.

2. Business Organisation Key Terms
Growth
• Diversification: This is when a business expands by moving into new markets. This might be achieved by a
merger.
• Horizontal Integration: One firm merging with another in the same industry at the same stage of produc-
tion.
• Lateral Integration: A firm expands by moving into a smaller, but different, area of production eg. build-
ing society buys an estate agent.
• Merger: The owners of two businesses agree to join their firms together to make one larger business.
• Vertical Integration: One firm merges with another at a different stage in the production chain.
Structure & Organisation
• Business Plan: A detailed outline of a business’ intention over a period of time.
• Chain of Command: A structure within a firm allowing instructions to be passed downwards through the
organisation.
• Objectives: Targets for a business to judge its success over a period of time. Objectives must be
S.M.A.R.T
• Organisational Structure: The levels of management and division of responsibilities within an organisation.
• SWOT: An analysis of the strengths, weaknesses, opportunities and threats of a business.
• Start up Costs: Costs paid out when setting up a new business or when expanding an existing one.
Business Organisation Key Terms
Growth
• Diversification: This is when a business expands by moving into new markets. This might be achieved by a
merger.
• Horizontal Integration: One firm merging with another in the same industry at the same stage of produc-
tion.
• Lateral Integration: A firm expands by moving into a smaller, but different, area of production eg. build-
ing society buys an estate agent.
• Merger: The owners of two businesses agree to join their firms together to make one larger business.
• Vertical Integration: One firm merges with another at a different stage in the production chain.
Structure & Organisation
• Business Plan: A detailed outline of a business’ intention over a period of time.
• Chain of Command: A structure within a firm allowing instructions to be passed downwards through the
organisation.
• Objectives: Targets for a business to judge its success over a period of time. Objectives must be
S.M.A.R.T
• Organisational Structure: The levels of management and division of responsibilities within an organisation.
• SWOT: An analysis of the strengths, weaknesses, opportunities and threats of a business.
• Start up Costs: Costs paid out when setting up a new business or when expanding an existing one.