Glossary

1.	articles of association (UK), (US bylaws)	document that defines a company’s internal organisation
2.	board of directors	group of individuals elected by shareholders to make the major decisions of the company
3.	certificate of incorporation	document issued by a governmental authority granting a company status as a legal entity
4.	company (UK), (US corporation)	institution created to conduct business, usually an association of persons. It exists as a separate legal entity from the owners ( who are called shareholders).
5.	constitutional documents	documents which define the existence of a legal entity and regulate the structure and control of the entity and its members. The exact form of the constitutional documents depend upon the type of the entity. Examples include (UK) memorandum of association ((US) articles of incorporation) and (UK) articles of association (US bylaws)
6.	limited liability	limitation of an owner / investor’s financial losses or responsibility, usually limited to the value of a person’s investment in a company or partnership with limited liability
7.	memorandum of association (UK) (US articles of incorporation)	legal document that sets out the important elements of the corporation, including its name address, objects and powers. It is one of the two fundamental documents upon which registration of a company is based
8.	partnership	business organization in which two or more people agree to do business together, sharing the profits and losses of the business together
9.	publicly listed company	business structure which is permitted to offer its shares for sale to the general public and traded on a public stock exchange
10.	share	ownership of a proportion of a company and the right to a proportion of any profit it makes
11.	shareholders	owners of a share of a company through a proportionate ownership interest of stock or equity
12.	sole proprietor	single person who earns all the profits and is personally liable for all the debts or losses of the business structure

Additional texts ways of running a business

Types of company vary in their specific details from one jurisdiction to another, which can create problems for lawyers and their foreign clients in terms of mutual understanding of business concepts. However, the general breakdown of businesses into companies, partnerships and sole proprietorships is very widely used. In simple terms, a sole proprietor is a person who works by himself, for himself (or herself). The person is the same as the business, so any successes or crises for the business will directly affect the person. A classic example of a sole proprietor is a plumber. If the plumber's business grows, he has two main options: he could join up with another plumber to form a partnership (in order, for example, to share marketing, accountancy or raw-materials costs). In such a partnership, the partners are still essentially the same as the company. If one of the partners dies or retires, the partnership will cease to exist. In many countries, law firms are required to be sole proprietorships or partnerships. The logic behind this requirement is that a lawyer should be personally responsible for representing a client, and might not give such impartial advice if he/she were protected within a company.

The second option available to the plumber, initially more bureaucratic, would be to incorporate as a company. In this case, the business would take on a life of its own (indeed, it is known as a legal person - a person in the eyes of the law). The plumber is now simply the owner of the business, and not the business itself, so he can sell all or part of it. Crucially, he is no longer personally liable for the company's problems. Liability means an obligation to make restitution or pay debts. If something goes wrong, the person liable may be sued. In a sole proprietorship or partnership, it is the people who are sued; in a company, it is the legal person (i.e. the company itself) which is sued. The owners can lose no more than their investments. In other words, they have limited liability.

Within the sphere of companies, many jurisdictions distinguish between those whose shares are traded publicly (i.e. on a stock market) and those which are traded privately, if at all (as in the example of the plumber's small company). In the UK, the abbreviation plc is used for a public limited company, and Ltd is used for private limited companies. In the USA, the main distinction is between С corporations (which pay corporate taxes and tend to be larger) and S corporations (which are taxed through their owners and tend to be smaller).