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Businnes Theme 1 PEOPLE > Business Forms > Flashcards

Business Forms Flashcards

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1
Q

Different classifications: By economic sector

A

Primary sector
Secondary sector
Tertiary sector

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2
Q

Different classifications: By geographical research

A

Local business
National business
Multinational business

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3
Q

Different classifications: By market type

A 
Consumer market (B2C)
Industrial market (B2B)
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4
Q

Different classifications: By owner type

A

Private sector

Public sector

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5
Q

What is unlimited liability?

A

Responsible for paying off all of the debts personally if the company can’t make its payments

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6
Q

What is Limited liability?

A

A persons financial liability is limited to a fixed sum, most commonly the value of a person’s investment in a company or partnership

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7
Q

What is a private limited company?

A 
“Company” (‘shareholders’)
- Limited liability 
- Incorporated
Aim: growth, profit 
- Sells shares, sales of assets 
- Dividends retained profit
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8
Q

Pros of private limited company

A
  • Limited liability
  • More capital, more shares
  • Control cannot be lost to outsides
  • Pay less tax
  • More credible, confidence from suppliers act
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9
Q

Cons of private limited company

A
  • Publish financial info
  • Profit shares
  • Cannot raise as large as public
  • Less Flexible
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10
Q

What is public limited company?

A 
“Company” (‘shareholders’)
- Limited liability 
- Incorporated 
Aim: growth, market share 
- General public can buy shares on stock exchange
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11
Q

Pros of public limited company

A
  • Huge amount of capital raised
  • More credible, confidence from suppliers
  • Exploit economies of scale lower costs, more competitive
  • Dominate market due to size
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12
Q

Cons of public limited company

A
  • Setting up costs are high
  • Outsiders can take control
  • Competitors use info to advantage
  • Legislation (processing of making or enacting laws)
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13
Q

What is a sole trader?

A 
“Business”- (‘owners’)
- Unlimited liability 
- Unincorporated
One individual 
Aim: survival
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14
Q

Pros of a sole trader

A
  • Have control
  • Flexible + adopt to change
  • Owner keeps profit
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15
Q

Cons of a sole trader

A
  • Unlimited liability
  • Struggle to raise finance
  • Too small to exploit economies of scale
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16
Q

What is a partnership?

A 
“Business”- (‘owners’)
- Unlimited liability 
- Unincorporated 
2 to 20 people
Aim: profit, growth and quality
17
Q

Pros of partnership

A
  • Specialise in different areas
  • Shared burden
  • More owners, more capital
  • Doesn’t have to publish info
18
Q

Cons of partnership

A
  • Unlimited liability
  • Share Profit
  • Disagreements
  • Limited growth
19
Q

What is a franchise?

A

Where a franchiser grants a license (franchise) to another business (franchisee) to allow it to trade using the brand/ business format

20
Q

Advantage of franchises

A
  • Expand and become more visible
  • Franchisor gives you support
  • Products and services will have already established a market share
21
Q

Disadvantages of franchises

A
  • Could damage reputation if franchise doesn’t do do well
  • All profits are shared with the franchisor
  • Contracts reduce independence
22
Q

What is a franchisor?

A

Person who owns idea

23
Q

Advantages of franchisor

A
  • Fast method for growth
  • Cheaper, as franchisee takes financial risk
  • More motivated then employees
24
Q

Disadvantages of franchisor

A
  • Profit shared
  • Poor franchisee can damage brand
  • Cost of supporting can be high
25
Q

What are cooperatives?

A

Business owned by its members

26
Q

Advantages of cooperatives

A
  • Shares ownership

- Mutual assistance

27
Q

Disadvantages of cooperatives

A
  • Profits are shared between everyone
28
Q

What is a joint venture?

A

Business agreement to develop a new corporate identity at a limited period of time

29
Q

What is a lifestyle business?

A

Aim: to create and sustainable particular level of income for the founders or owners, nothing more
In other words, it’s purpose is to facilitate a particular lifestyle

30
Q

What is an online business?

A

All activities of the business is using the internet (not only to sell/ buy goods/ services, but also to exchange info)

E.g eBay, Amazon

31
Q

What is a social business?

A

By selling goods and service in the open market, social enterprises reinvest the money they make back into their business or the community

32
Q

Social business (continue)

A

This allows them to tackle social problems, improve people’s life chances, support communities and help the environment
So when a social enterprise profits, society profits

33
Q

What is a creditor?

A

Those owed money by a business

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