1. Business Types, Forms, and its Requirements Flashcards
(27 cards)
Is an organization that uses economic resources to provide goods or services to customers in exchange for money or other goods and services?
business entity
It is a person or organization engaged in the regular conduct of commercial, industrial or professional activities, whether for profit or not, in order to fulfill a purpose, goal, mission or cause.
business entity
It is the regular conduct or pursuit of a commercial activity or an economic activity, including transactions incidental thereto, by any person regardless of whether or not the person is engaged therein is a non-stock, non-profit private organization or government entity.
business
Provides intangible products (products with no physical form) for a fee. Offers professional skills, expertise, advice, and other similar products
Service Business
buys products and sells the same at prices higher than their purchase costs. They are known as “buy and sell” businesses.
merchandising business
Business that buys a product and sells it without changing its form.
merchandising business
Examples of this type of business are grocery stores, convenience stores, distributors, and other resellers.
merchandising business
Buys materials and converts them into a new product.
manufacturing business
Combinesraw materials, labor, and overhead costsin its production process. The goods produced will then be sold to customers.
manufacturing business
These are companies that can be classified in more than one type of business. They run different departments or divisions for different purposes.
Mixed/Hybrid Business
An example of this is a restaurant, combines ingredients in making a fine meal (manufacturing), sells a cold bottle of wine (merchandising), and fills customer orders (service).
Mixed/Hybrid Business
is the simplest business form under which one can operate a business.
sole proprietorship
It is a business owned by only one person and is personally responsible for its debts.
sole proprietorship
usually adopted by small business entities due to its simplicity, ease of setup, and nominal cost.
sole proprietorship
The owner facesunlimited liability; meaning, the creditors of the business may go after the personal assets of the owner if the business cannot pay them.
Sole Proprietorship
Limited source of funds
Sole Proprietorship; disadvantages
Owners are subject to liability for the debts, losses and liabilities of the business
disadvantages; sole proprietorship
Owner has full control over business decisions
advantages; sole proprietorship
is a business owned by two or more persons who contribute resources into the entity, and divide the profits among themselves.
Partnership
Partners have unlimited liability with regard to the liabilities and debts of the business
disadvantages of apartnership
Limited ability to raise capital
Divided authority
disadvantages of apartnership
Business organization that has a separate legal personality from its owners. It is usually adopted by large business organizations.
Corporation
Ownership is usually represented by shares of stock.
Corporation
easy to transfer ownership
advantages of a corporation
