Aos 1 Flashcards
Sole trader
One person who owns business
Partnership
2-20 who own business
Company
Separate legal entity from owners
Owners are shareholders
Private limited company
1-50 shareholders
Seen with Pty Ltd
Public Listed Company
Unlimited shareholders
Seen with Ltd
Social enterprise
Business that sells product/service for profit to put back into their cause to benefit community and/or environment
Government business enterprise
Government owned business
Make profit by carrying out government policies
Sole trader advantages and disadvantages
Advantages
- Simple and inexpensive
- owner has total control
Disadvantage
- harder to finance
- only owners knowledge and skills
- unlimited liability
Partnership advantages and disadvantages
advantages
- work load is split
- risk is shared
- inexpensive and simple
disadvantages
- arguments
- unlimited liability
- liable for other partners debt
Pty Ltd advantages and disadvantages
Advantages
- limited liability
- separate legal entity
- extra capital if issued more shares
disadvantages
- higher establishment costs
- higher complexity establishing
- more government control
Ltd advantages and disadvantages
advantages
- limited liability
- more capital by selling shares
- separate legal entity
disadvantages
- more accountability and compliance paperwork
- highly complex structure
- high establishment cost
Business objectives
Statements of wanted achievement which directs the business
Vision statement
Reflect direction and objective
Mission statement
Purpose for business
Values statement
Business’ values and principles
Financial business objective
Making a profit
Marketing businesses objective
Fulfilling market need and increasing market share
Social business objective
Fulfill social need
Meeting shareholder expectation business objective
Share will increase in values because shareholders expect a dividend (% or profits)
Efficiency objective
Best use of resources in production of good or services
Effectiveness objective
How well business doing at what they say
