AOS1 - Business Foundations Flashcards
What is a business?
An entity that is involved in the provision of goods and/or services to consumers
What is business?
Lawful commercial activities to earn profit.
What is a Sole Trader?
An individual operating as a sole person legally responsible for all aspects of the business
What is the difference between Limited and Unlimited Liability?
Limited Liability is where business owners are not personally responsible for business debts whereas with Unlimited Liability the owner of the business can be held responsible for the debts of the organisation
What are the attributes of a Sole Trader?
Unlimited Liability, Simple, Full Control, Low Cost
What is a Partnership?
Involves a number of people (2-20) who carry the duties of a business together
What are the attributes of a Partnership?
Unlimited Liability, Partnership Act 1958, Simple, Shared Control, Low Cost, Separate TFN
What is a Private Limited Company?
A Company where operations are controlled by directors and owned by investors. Profits are distributed to investors as dividends
What are the attributes of a Private Limited Company?
Limited Liability, Corporations Act 2001, Separate Legal Identity, Private Share Trading, Expensive, Max 50 Shareholders
What is a Public Limited Company?
A Company where operations are controlled by directors and owned by shareholders and allow for public trading of shares on the Stock Exchange
What are the attributes of a Public Limited Company?
Limited Liability, Corporations Act 2001, Separate Legal Identity, Public Share Trading, Expensive, Min 50 Shareholders
What is a Social Enterprise?
Revenue-generating business with a focus on social objectives over profit
What are the attributes of a Social Enterprise?
Led by Economic, Social, Cultural or Environmental Mission, Provides Services to the Community, Surpluses reinvested into business, Incorporated
What is a Government Business Enterprise?
A Commonwealth entity that aims to act under general business principles to make profit
What are the attributes of a Government Business Enterprise?
Owned and Operated by Gov, Service to Community, Incorporated, Profit Minded, Business Structure (revenue, pay tax)
What is a Business Objective?
An aim or goal by which the business strives towards completing in the future.
What does the business objective “Make a profit” refer to?
The surplus remaining after total costs are deducted from total revenue and the basis on which tax is calculated and dividends are paid
What does the business objective “Increase Market Share” refer to?
The percentage of that total industry sales that the business in question receives
What does the business objective “Fulfil Market Need” refer to?
Identifying what the target market requires and meeting those needs with you goods and services
What does the business objective “Fulfil Social Need” refer to?
Benefitting the community through the actions of the business
What does the business objective “Meet Shareholder’s Expectations” refer to?
Expectations including capital gains on shares, dividends and voting rights
What does Capital Gain mean?
Capital gain is an increase in the value of a capital asset that gives it a higher worth than the purchase price.