1.2 Business Structure Flashcards
Primary sector
Extractive industries that gather raw materials.
Secondary sector
Industries that manufacture raw materials from primary sectors into tangible products.
Tertiary sector
Provide intangible services.
Public sector
Organization that is accountable and controlled by central or local government. Produces public goods which are non-rivalry.
Private sector
Business owned and controlled by individuals or groups of individuals. Produces private goods which have rivalry.
Merit goods
Goods and services that the government feels that people will under consume and are to be provided for free. They are on a basis of concept of need rather than willingness to pay.
Demerit goods
Goods/services whose consumption is considered unhealthy and socially undesirable due to the negative effects on consumers and negative externalities.
Unlimited liability
The sole trader is personally responsible for all the debts of the business. The debts are not limited and might endanger personal possessions.
Limited liability
A legal protection which limits the debts owed by an individual owner of a company to the sum of money they have invested.
Sole trader
A business owned, controlled and financed by one person.
Partnership
Business formed by 2-20 people to run the business together, shared capital investment and responsibilities.
Private limited company
Small business owned by shareholders. Shares can only be bought directly from the company with permission.
Public limited company
A large business, with the legal right to sell shares to the general public.
Franchise
A business that uses the business.
Cooperatives
Business owned by members and runned by said members.
