Business Flashcards
Explain sole trader.
Owned by one person. Income tax assessed according to personal tax.
Advantages: makes all decisions, keeps all profits, cheap to set up.
Disadvantages: difficult to obtain finances, unlimited liability-business goes broke, personal assets sold.
Explain partnership.
Owned by 2-20 people. Income tax assessed according to personal tax. Profits distributed.
Advantages: greater access to resources and money, shared workload, different people=different strengths.
Disadvantages: unlimited liability, disagreements about running, problems if someone wants to leave.
Explain private company.
Between 1-50 private shareholders. 30% tax as they are private legal entity. Pty Ltd after name (proprietary limited)
Advantages: limited liability, easier to access finance, shares can be sold to leave
Disadvantages: more expensive to register name, accounting fees are higher-stricter rules, less say in day to day business running.
Forms of business ownership?
Sole trader, partnership, private company.
Define: business ethics
The moral guidelines and principles a business should follow. Most large scale organisations have a code of conduct so employees know what is expected of them.
How to be an ethical producer?
- Establish partnerships with suppliers that have ethical policies in place.
- Ensure fair price is paid for suppliers, when using resources from poorer countries.
- Introduce an ethics committee that meets regularly in workplace about ethical issues.
How to be an ethical consumer?
- Do research and buy products from businesses with a strong ethical reputation.
- Don’t use price as a sole criterion when purchasing products (Eg. Use cosmetics that haven’t been tested on animal, though price may be higher)
Define: business ethics
The moral guidelines and principles a business should follow. Most large scale organisations have a code of conduct so employees know what is expected of them.
How to be an ethical producer?
- Establish partnerships with suppliers that have ethical policies in place.
- Ensure fair price is paid for suppliers, when using resources from poorer countries.
- Introduce an ethics committee that meets regularly in workplace about ethical issues.
How to be an ethical consumer?
- Do research and buy products from businesses with a strong ethical reputation.
- Don’t use price as a sole criterion when purchasing products (Eg. Use cosmetics that haven’t been tested on animal, though price may be higher)
Location of a business.
Visibility, cost, proximity to customers & suppliers, proximity to competitors, complementary business.
