Business Structures Flashcards
What is a sole trader?
Keep all profits after tax
Pay Income tax and insurance
Personal responsibility for debt
Solely responsible for business and its legal requirements
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Easier to start up
No relationship Issue
Low costs
-
liability to debt over personal assets
Income tax higher than corp. tax
What is an ordinary partnership?
More one business owner people or companies. Share responsibility and liability over debt
Share business profit
Income tax over their profit
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Higher business performance
Less tax
-
Less control
Less income
Relationships can easily disrupt business running
What is limited liability partnership?
More than one owner of business
Personal assets are all protected by business
Partners all get share of profit and pay individual income tax
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Flexible income shared and responsibility
-
Disclose income
start trade in 1 yr
What is a limited Company?
LTD by shares
is legally separate from the people who run it
has separate finances from your personal ones
has shares and shareholders
can keep any profits it makes after paying tax
LTD by guarantee
not for profit’. This means the company:
is legally separate from the people who run it
has separate finances from your personal ones
has guarantors and a ‘guaranteed amount’
invests profits it makes back into the company
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Limited liability
Chance of loans increased possibly
Not for profit business
-
Set up costs are high
Directors can face fines
What is a flat business structure?
No levels of employees before the owner or director
What is a hierarchal business structure?
Levels of employee between the owner or director
What is the primary sector?
Extractor or harvester of raw materials which supply first line of goods
What is the secondary sector?
Producing goods using the natural materials. This involves manufacturing and distribution
What is the tertiary sector?
Providing commercial services supporting production and distribution
What is an economy?
A series of markets where goods and services are exchanged, facilitated by capital, combine to make an economy
What is value of output?
Value of output is the market value of all of the goods and services that are produced by a business during an accounting year.
