1.2 Understanding different business forms Flashcards
What is the private sector?
Owned,financed and run by private individuals. Most aim to make a profit however some are non profit organisations
What is the public sector?
Owned and operated by the government, they mainly provide essential services. Financed through tax
What are the 2 types of private sectors
Unincorporated- No distinction in law between the individual owner and the business itself
Incorporated- This has a legal identity that is separate from the individual owners
What are the 4 private business forms?
Sole trader
Private limited company (LTD)
public limited company (plc)
partnerships
What influences share prices?
State of economy, Performance of the company, Competition in the market, Proposed takeover, Investors expectations and their response to rumours
What factors influence cost and demand?
Competition, Incomes, Interest rate, Demographic, Environmental issues
What is limited liability?
a situation where the liability of the owners of a business is limited to the fully paid up value of the share capital
What is ordinary share capital?
money given to a company by shareholders in return for a share certificate that gives them part ownership of the business
What is dividends?
A payment made by a company to its shareholders out of profits earned
What is market capitalisation?
The value of outstanding shares in a plc. outstanding shares are the total of all ordinary shares issued and fully paid
What is a non profit organisation?
this sector includes voluntary and community organisations, charities l, social enterprises, pressure groups, trade unions, co-operatives, mutual society and trusts
