Bst Flashcards
What is primary sector?
The primary sector of industry extracts and uses the natural resources of earth to produce raw materials used by other businesses.
What is secondary sector?
The secondary sector of industry manufacturers goods using raw materials provided by the primary sector.
What is tertiary Sector?
The tertiary sector of industry provides services to consumers and other sectors of Industy.
What is horizontal integration?
Horizontal integration is when one business mergers with or takes over another one of same industry and the same stage of production
What are the benefits of horizontal integration?
This reduces the number of competitors
There are opportunities for economics of scale.
Higger market share
What is vertical integration?
Vertical integration is when a business mergers or takes over another one at the same industry but on a different stage of production this can be forward or backward
What is benefits of forward vertical integration?
Assured outlet for its product
More profit
There is opportunity for economics of scale
What is benefit of backward vertical integration?
Other costs can be controlled
More profit
Can stop production for other business
Assused supply for its important parts
What is conglomerate integration?
Conglomerate integration is when a business take over or mergers with another one from a complete different industry.
What are the benefits of conglomerate integration?
More than one activity in the business
Transfer of ideas
What is sole trader?
Sole trader is a business owned by one person.
What are the advantages of being a sole trader?
Independent
More profit
Connect to consumers
Complete security in business mates
Few legal regulations required
What the disadvantages of being sole trader?
No one to discuss business Mattar with
No profit of limited liability
Less captain
If own is on leave the production stops
Who all are advanced for sole trader?
People who are setting up a new business
Don’t need much profit to get the business going
Will deal mainly with public
What is partnership?
Partnership is a form of business in which two or people agree to jointy to own
What are the advantages of partnership?
More capital
Less responsibility
Profit or loss will be shared
What are the disadvantages of partnership?
They don’t have limited liability
If one partner dies the partnership ends
If one person is ineffiect or dishonest the others have to go with loose
Decision and consulting takes time
What are the setting sisituation when partnership suitable?
When partnership are very close.
When provisional body needs partners not a company
When partners wish to learn form business but avoid legal complications
__________________ this type of partnership exists after a partner’s
Death.
Limited partnership
What does a incorporate business mean?
A company exists separately from the owners and will continue to exists when one of owners dies.
A company can make contract or legal agreement
Company accounts are kept separate from owners accounts.
What is private limited companies?
Private limited companies are business owned by shareholders but they cannot sell shares to public
What are the advantages of private limited companies?
Shares can be sold to a large number of people
All shareholders have limited liability
The owners will be able to keep control of it as long as they don’t sell most share ro people
What is the disadvantage of private limited company?
A lot of significant legal mater which have to be dealt before the company can form.
Accounts are less secret
Shares cannot be sold or transferred to someone else without the agreement of other shareholders.
