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Business > 1.3 And 1.4 > Flashcards

1.3 And 1.4 Flashcards

1
Q

What is Capital

A

Money raised to start or develop a business

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2
Q

What is unlimited liability

A

Where the responsibility of all debts of the business rests with the owner(s)

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3
Q

What’s limited liability

A

Where the responsibility of all debts is limited to the amount invested by a shareholder

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4
Q

What is a deed of partnership

A

A document setting out the operations of the partnership including the amount of capital invested and how profits will be shared

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5
Q

What are sleeping partners

A

They are people who provide capital for the business but take no part in the running of the business . Their livability is limited to the amount they invest

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6
Q

What is a dividend

A

The money paid to shareholders from the profits of a limited company

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7
Q

What’s a sole trader

A

Are businesses owned my 1 person

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8
Q

What are some positives of being a sole trader

A
  • easy and cheap to set up
  • owner has complete control
  • keep all the profits
  • financial information is not shared
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9
Q

What are some negatives of being a sole trader

A
  • unlimited liability
  • hours of work may be long or cause illness
  • continuity
  • shortage of capital
  • skill shortage
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10
Q

What’s a partnership

A

A business owned between 2-20 people . A deed of partnership should be completed by the business

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11
Q

What are some positives of a partnership

A
  • more capital can be put in (up to 19 more people)
    -easy to set up
  • more skills
  • workload shared
  • financial information is not shared
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12
Q

What are some negatives of a partnership

A
  • profit must be shared
  • unlimited liability
  • slower decision making
  • continuity
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13
Q

Who had unlimited liability

A

Sole traders and partnerships

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14
Q

Who has limited liability

A

Private limited companies and public limited companies

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15
Q

What is the abbreviation for private limited companies

A

Ltd

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16
Q

What are private limited companies

A

Businesses owned by 2 shareholders

17
Q

What are some positives of being a private limited company

A
  • limited liability
  • continuity
  • can raise more money
  • control over share sale
18
Q

What are some negatives of being a private limited company

A
  • some financial information is available
  • admin (setup, operations and financial information must be sent to a registrar of companies. )
  • sale shares is restricted
  • dividends
19
Q

What is the abbreviation for public limited company

A

Plc

20
Q

What’s a public limited company

A

A business owned by shareholders . Shares in the business can be bought and sold on the stock exchange

21
Q

What are some positives of a public limited company

A
  • Ability to raise large capital
  • easier to borrow
    -limited liability
22
Q

What are some negatives of a public limited company

A

-possibility of takeover
- costs ( a plc must have £50000 worth of shares )
- big businesses can be inefficient
- financial information is available

23
Q

What are limited liability partnerships

A

Partnerships that have all of benefits of being a partnership. But also have limited liability

24
Q

What is satisfacing

A

Making just enough profit to proved the business owner with a decent living . It’s more common in smaller businesses

25
Q

What is market share

A

The share of the total market for a product or service and is shown

26
Q

What are business objectives

A

What a business aims to achieve

27
Q

Define profit

A

The difference between revenue and costs

28
Q

What is survival

A

When a business manages to just keep going

29
Q

What is growth

A

Where a business becomes larger for example by making more products or opening more places where goods and services are sold

30
Q

What doesProviding a service mean

A

Where a business makes sure the needs of customers are being met

31
Q

What are some likely business objectives

A

Profit , growth , survival , providing a service or an increase in market share

32
Q

How to calculate market share

A

Revenue of business divided by total shares in market x 100 = market share

33
Q

Why might different businesses have different objectives

A
  • they may want a quiet life
  • a plc may want dividends for shareholders or increase market share
  • a business might want to help out the community
  • a business in a competitive industry may just want to survive

Business (4 decks)

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