Business Sectors Flashcards
Define the Primary Sector.
Businesses collect and extract raw materials and natural resources.
Give 4 examples of the Primary Sector.
- Farming
- Forestry
- Mining
- Agriculture
Define the Secondary Sector.
- Transform raw materials
- Manufacturing industry
- Further processing
Give 4 examples of the Secondary Sector.
- Construction
- Factories
- Electricity
- Manufacturing
Define the Tertiary Sector.
- Offer services
- Service industry
- Facilitates transport,distribution and sale of goods.
Give 4 examples of the Tertiary Sector.
- Financing
- Storage
- Tourism
- Hospitality
What is the relationship between these 3 Sectors?
- Economic chain of production
- Gathers materials
- Transforms materials
- Sells goods or services
What is the meaning of the Formal Sector?
- Registered and pay taxes
- Register with CIPC
- Register with SARS
- Liable to pay tax on turnover and profits
What does CIPC stand for?
Companies and Intellectual Property Commission
What does SARS stand for?
South African Revenue Services
What is the meaning of the Informal Sector?
- Not registered and don’t pay tax
- Workers who are self-employed
- Owners take responsibility
Provide 4 differences between Formal and Informal Sector.
Formal
- Registered with CIPC
- Pay tax to SARS
- Activities are monitored by government.
- Income is regular weekly/monthly
Informal
- Not registered with CIPC
- Don’t pay tax
- Activities not monitored by government
- Income is irregular and inconsistent
Why is the Formal Sector important?
- GDP figures
- Taxes on profits
- Employees pay personal income tax
- Large variety of goods and services
Why is the Informal Sector important?
- Encourages entrepreneurship and self-employment.
- Easy to enter
- Work experience
- Employment opportunities for communities
What is the meaning of the Public Sector?
- Owned and managed by government
- Sate-owned companies
- No private companies, household and voluntary organisations.
What is the meaning of the Private Sector?
- Owned, financed and run by private individuals
- Aim is to make a profit
- Sole traders, Partnerships, Profit companies and Closed Corporations
Name 4 purposes of the Public Sector.
- Equal distribution of wealth
- Job opportunities
- Improves general standard of living
- Limits anti-competitive behaviour
Name 4 purposes of the Private Sector.
- Job opportunities
- Opportunity to create wealth for growth
- Contributes to tax revenues.
- Offers large variety of goods
Provide 4 diffferences of the Public and Private Sector.
Public
- Equal distribution of wealth
- Goods and services provided by government.
- Improves general standard of living
- Provides infrastructure to support Private Sector
Private
- Opportunities for businesses to create wealth
- Provides goods and services with aim of making a profit.
- Uplifts community through corporate social responsibility programs
- Support Public sector through public-private-partnership agreements.
