Contrasting concepts
Private limited company – public limited liability company: a PLC is mostly used for small
businesses, has a limited liability to their contribution, needs no minimum capital and is
possible to set up with one shareholder. While if you choose a PLLC it is used for small and
medium-sized companies as well as larger companies, there is a limited liability for the
stakeholders, there is a minimum capital required of 61,500 euros and you need to be with at
least two shareholders.
Private limited company – cooperative company: a PLC is focused on profit while a CC isn’t,
they want to attain a mutual goal of working together. A PLC is possible to set up with only
one shareholder while if you want a CC you should be with at least three members.
Partnership – sole trader/ proprietorship: a partnership has as purpose to share profit, it
shut be set up with at least two founders who are both liable for the debts and obligations of
the business. The purpose of a sole trader is to provide a good product or service to the local
community and provide customer satisfaction. The disadvantage of a sole trader is that it has
full liability, so there is no separation between his assets and those of the business
Salary – wage: A salary is when you pay employees the same amount each pay period
regardless of how much they work. In contrast, a wage is an hourly rate you pay employees
based on how much time they put in during a pay period.
Net income – revenue: Revenue is defined as the income generated through a business'
primary operations. Net Income is an accounting term that refers to the total revenue minus
the total expenses for any given period.
Lend – borrow: 'Lend' means to give something to someone to be used for a period of time
and then returned. 'Borrow' means to take and use something that belongs to someone else
for a period of time and then return it. The person lending something owns it and is letting
someone else use it.
Obligation – bond: an obligation is an act or course of action to which a person is morally or
legally bound; a duty or commitment. A bond is a fixed-income instrument that represents a
loan made by an investor to a borrower.
Liability – asset: Assets are the items your company owns that can provide future economic
benefit. Liabilities are what you owe other parties. In short, assets put money in your pocket,
and liabilities take money out!
Income statement – balance sheet: An income statement shows the profitability of a
company and is over a period of time. The measures are revenue expenses and profitability.
Whereas a balance sheet is about a point in time and shows the financial position by making
use of assets, liabilities and shareholders’ equity.
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