Business sectors and types of businesses Flashcards
What is the chain of production?
Stages that a product passes through until it reaches the final consumer
What businesses operate in the primary sector?
Exraction of raw materials e.g. fishing, farming, or mining
What businesses operate in the secondary sector?
Manufacturing businesses e.g. wood carver
What businesses operate in the tertiary sector?
Retailers e.g. Ikea
What is the private sector?
Businesses owned and ran by private individuals e.g. sole trader, partnership, and limited companies
What is the public sector?
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
What is a sole trader?
One person who owns a business and makes all the decisions affecting it
What are the advantages of being a sole trader?
- few legal requirements
- makes all decisions
- keeps all profit
- cannot be taken over
- finances kept private
What are the disadvantages of being a sole trader?
- fully responsible
- no continuity
- unlimited liability
- long hours
What is a partnership?
two or more people who share the ownership of a business
What are the advantages of partnerships?
- shared skills
- easy to establish
- shared losses
- finances kept private
What are the disadvantages of partnerships?
- shared profit
- unlimited liability
- lack capital for expansion
- could end if one partner leaves
What is a limited liability partnership?
A combination of a limited company as well as a partnership
What are the differences between a Private and public limited company?
- 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
What are some similarities between a Ltd and Plc?
- board of directors run a company
- shareholders must receive a copy of reports
- shareholders receive one vote per share
