Business sectors and types of businesses Flashcards

1
Q

What is the chain of production?

A

Stages that a product passes through until it reaches the final consumer

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2
Q

What businesses operate in the primary sector?

A

Exraction of raw materials e.g. fishing, farming, or mining

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3
Q

What businesses operate in the secondary sector?

A

Manufacturing businesses e.g. wood carver

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4
Q

What businesses operate in the tertiary sector?

A

Retailers e.g. Ikea

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5
Q

What is the private sector?

A

Businesses owned and ran by private individuals e.g. sole trader, partnership, and limited companies

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6
Q

What is the public sector?

A

Businesses and organisations owned and ran by local or central government, objective is to provide a service rather than make a profit e.g. central government owned and local government owned

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7
Q

What is a sole trader?

A

One person who owns a business and makes all the decisions affecting it

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8
Q

What are the advantages of being a sole trader?

A
  • few legal requirements
  • makes all decisions
  • keeps all profit
  • cannot be taken over
  • finances kept private
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9
Q

What are the disadvantages of being a sole trader?

A
  • fully responsible
  • no continuity
  • unlimited liability
  • long hours
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10
Q

What is a partnership?

A

two or more people who share the ownership of a business

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11
Q

What are the advantages of partnerships?

A
  • shared skills
  • easy to establish
  • shared losses
  • finances kept private
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12
Q

What are the disadvantages of partnerships?

A
  • shared profit
  • unlimited liability
  • lack capital for expansion
  • could end if one partner leaves
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13
Q

What is a limited liability partnership?

A

A combination of a limited company as well as a partnership

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14
Q

What are the differences between a Private and public limited company?

A
  • Ltd and Plc
  • a plc can sell shares on the stock market
  • plc is required to have a share capital of £50,000
  • ltd does not give shareholders too much financial detail
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15
Q

What are some similarities between a Ltd and Plc?

A
  • board of directors run a company
  • shareholders must receive a copy of reports
  • shareholders receive one vote per share
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16
Q

Advantages of companies;

A
  • access to capital
  • limited liability
  • easy to invest
  • continuity
17
Q

Disadvantages of companies;

A
  • expensive to set up
  • complicated
  • company accounts are public
  • danger of take over
  • large companies require larger management structures
18
Q

What is the third sector?

A

non profitable organisations, gain profit through tade or donations e.g. charities