3a Types of business structures Flashcards
What are the four types of business structure?
Sole trader
Partnerships
Private limited companies
Public listed companies
What is a sole trader?
A sole trader is a business structure that is owned and operated by one individual.
What does Unincorporated, Unlimited liability, and Debt mean?
Unincorporated - is the business owner and the business is viewed as the same entity.
Unlimited liability - is the business owner being held personally responsible for the business’s debts.
Debt - is the amounts of money that an individual or business owes.
Give a theory inaction of a sole trader.
Stanley Yu is a sole trader of his gourmet supermarket business called Epicure. Stanley structured Epicure as a sole trader as it was simple and cost effective. He conducts the majority of business activities, such as stocking shelves and manning the checkout. Stanley has full control over decisions such as the business’s direction and purpose.
What is a partnership?
A partnership is a business structure that is owned by two to 20 people.
What is a partnership agreement?
A partnership agreement outlines the roles and expectations of all partners in the business.
What is a private limited company?
A private limited company is an incorporated business structure that has at least one director and a maximum of 50 shareholders.
What does Incorporated, Shareholders, Director, and Limited liability mean?
Incorporated - is the establishment of the business owner and the business as separate legal entities.
Shareholders - are the individuals who have purchased part of a company and therefore are owners of the company.
A director - is a person or a group of people who are responsible and in charge of a company.
Limited liability - is when the business owner is not held personally responsible for the business’s debts.
What is a public listed company?
A public listed company is an incorporated business structure that is managed by directors and has an unlimited number of shareholders.
What is the asx
The Australian Securities Exchange (ASX) is where companies can raise money by selling shares publicly to investors who will then have partial ownership of the company.
What is a business?
A commercial organisation where goods and services are traded for money.
