1a Types of buisnesses

Question 1

Sole Trader

Answer 1

A sole trader is a business structure that is owned by a single person. It is the Simplest and most cost-effective legal business structure.

• Simple and most cost effective legal business structure
• Unlimited liability for al debts
• Proprietor is personally responsible for all payments of loans.

Question 2

Partnership

Answer 2

A partnership is a type of business owned by two to twenty owners.

• Simple and cost effective
• Responsibilities are shared among partners.
• partners are responsible for funding
• partners must pay personal income tax on income

Question 3

Private limited company

Answer 3

A private limited company is an incorporated business
with at least one director and up to 50 selected shareholders.
- considered a separate legal entity to the owners.
- shareholders have limited liability for the business.
- all private companies must include*( propriety limited(Pty.Ltd)) after their business name
- can raise funds by selling their shares
shareholders must pay further personal income tax on any profits they individually receive

Question 4

Public listed company

Answer 4

A public listed company is an incorporated business that can sell shares in an open market to an unlimited number of shareholders.

• can raise funds by selling shares to the general public on the stock market.
• Shareholders can generate profit by selling shares for a larger price later.
• All companies listed on the ASX will also have “limited”(Ltd) after their business name.
• minimum of 3 directors
• stricter government regulations than other types of businesses.

Question 5

Social enterprise

Answer 5

A social enterprise is a business that aims to make a profit and improve the community or environment.
- not considered a legal business structure in Australia
- these are sole traders, partnerships or private companies that work toward a community or environmental cause.
- aim to generate profit by sails or donations.
- this is not a not for profit organisation(NFP).
profits are reinvested or donated to a charitable cause.

Question 6

Government business enterprise.

Answer 6

A profit driven Business that is owned by but managed separately from the governments.

• often a large scale service, which aims to cater for public needs.
• Accountable to public and Governments