Businesss revision Flashcards
Define an Objective
a short term target that will help you to achieve an aim, and it must be measurbale
examples of objcetives?
- develop 2 new products
- increade customers satisfaction
- reduce employee turnover
define the term aim
propose or intend, long term and not easily measurbale.
why does a business need aims?
to expand and develop
financial
aims focused on profit and finance, moneh wise, increase market share, opening branches and number of employees. for example: surviving, profit, growth, financial security
non finacial
focuses more on the sagtisfaction of the services. foe example: helping charities, customers satisfaction
financial security
the owner wantong the business to be stable
financial objectives:
survival, growth, profit, increase in market share, financial security
non finacial objectives
social objetives, personal satisfaction, challenge, independece + control
smart objectives
short term targets that are very precisive, realistic, attainable, and time related
as a business develops or evolves its objectives are likely to chnage mainly due to….
external and internal influences
what should a 3 mark structure involve
1- point
2- because
3- leading to
explain why do businessess aims chnage over time. (3) marks
menaing of legislations
the making or giving of laws
why do aims and objectives change?
- technology
- met tagets already
- legislation
- internak reaons
what is firm
a private organization
How might the size of a business be measured?
Business size is typically measured by the number of employees, annual turnover, market share, or total assets
What is a sole trader?
a single person who own the bsuienss and makes all the decisons and gets all the profit
define a partnership
2-20 people work in a a partnership, more skills and ideas, shared profit
for what orgnization is the 2-20 rule allowed to break?
- lawyers
- medical association/medical field
- engineers
architects
what is a sleeping partner?
a sleeping partner , is a not active role day-to-day, someone who has contributed financially to the business set up. invest moeny in the business and profit is given to him
what is a deed of partenership?
a deed of partnership is a contract that must be arranged. this contract will include all the info of the business and the two individuals parts and what each contributes in the business.
how should a six marker look like?
2 points, context
- market
- situation
- product
5 link srands, details
what does the law state with the deed of partnership?
both indivisuals will be the same if theres no deed of partnership
who sets up a private limited company?
sole traders or partnerships that want to grow their business but still being safe in a way where if their business goes bankrup, the individuals dont have to sell their personal belongings. but u will loose the money invested in the business
in private limites comapany whos seperated?
you and the busienss are two different properties
what is a private limited company owned by?
shareholders, people who own the business within a limited company
who runs the company in private limited companies?
board of direction
company is a sepperate legal entity from you true or false
true
why people might not to sign as a private limited company?
- takes time to set up,as there are a lot of documents, contracts and registrations
what can you loose in private limited companies
you can loose your business and everything under that name.
minimum of shareholders in private limites companies?
3
who mainly runs to private limites companies?
families, that want to do a family business
define what is meant by:
prodcut
market
situation
product- what the business sells ex.. apple sells technology like ipads, phones and macbooks
market- who goes to buy in the business, ex…apple: people who are techonology fans and can afford to buy from there.
sitution- what the goals might be of that business. ex… apple: more customers, more updated phones, more ideas etc….
What is a sole tarder?
a single person that own a business and have unlimited liability
what is unlimited liability?
unlimited liability simply means that when an individual doesnt have enough money to pay off the debt of the business, the individual has to sell their personal belongings etc a car in order to pay back
advatges of a sole trader?
- owner gaining all the profit
- flexability, can adapt to changes more easily
- faster decision making as there is no need to consult with anybody
- easy to set up
disadvanatges of a sole trader?
- isolation, cant consult with anobody his ideas
- lack of ideas
- unlimited liability
- sruggle to raise finace
- too many responsabilities
what is a partnership?
business owned between 2-20 people
there is an exception for the 20 parters rule, who is ti for?
- lawyers
- engineers
- medical practices
- banks - financial institution
what is the deed of partnership?
it is a legal document that is needed by teh government about the details of a business
what does a deed of partneship contain?
- personal infimation of the partners
- sharing looses and profit
- selling partnership conditions
- new parteners joining
what is a sleeping partner?
a person thar doesnt have an active day-to-day running the business, but conttributed financially to set up the business
what type of liability does a sleeping partner have?
limited liability and we can remeber this as a sleeping partner is also called limited partner
what is a private limited company?
LTD- its a company where you are only allowed to shares with family, friends and people you know
who owns a private limited comapny?
shares owned by that family that own it. business owned by shareholders and run by the directors
what do you have to do if you have a private limited company?
AGM, anuual general meeting
Shareholders
Someone who owns (shares) within a limited company
A Share
is basically a piece of paper that says that the holder owns a part of a company.
Board of directors
Voted by shareholders to run the business
Dividends –
a share of the companies profits given back to shareholders
Annual General meeting
An annual meeting for shareholders held by limited companies
advanatges of a limited company
you will loose eveyting under the name of the business or the moeny that was put in the business, nothin else
- More capital can be raised as no limit on shareholders (more money to expand)
Control of company cannot be lost to outsiders as shares only sold to friends & family.
Continuity of business if owners dies
what is a franchise
a franchise is the right given to someone by one business to other busiensses to sell goods using their name
formation of limites copanies
Memorandum of Association – gives details about the company (shares/address).
Articles of Association – Internal rules of the business.
disadvanatges of a limited company
limited companies can be more expensive to set up and run than other business structures, and you may have less control over your business depending on the people involved.
The shareholders are ultimately in charge of the business.
Difficult to set up due to formation process
what is stock exchange?
Stock Exchange - a market in which shares are bought and sold.
So… Shareholder can buy & sell their shares on the stock Exchange.
E.g. Apple is a Plc so shares can be sold and bought by ANYONE.
what is a public limited company
PLC- PLC is the only type of company allowed to be quoted on the Stock Exchange. shares can be bought and old by anyone
disadvantges of public limites companies
Any profits must be shared out amongst all the shareholders.
Control of company can be lost – if someone owns 51% of shares they will control the business.
ANYONE can buy shares on the stock exchange.
what is an independent business
free from otside world
what is there usually in a franchise?
- an intitial set up fee - can be costy
- a % of sales is paid annualy (royalties)
who are the people involved in a franchise?
franchisor- the person who 0riginally developed the business and trading name
framchisee- person who buys the right to use the well known business name
what does a franchisee required to do?
- required to invest money according to the franchse license and setting up of the business- set up fee
- has to pay propotion of sales on a regualr basis- royalties- mus be pay regardless of the profit
advantages of a franchise
- advertising paid from franchisor
- right to own eqipment to do the well job
- tried and tested business model
disadvanatges of a franchise
- cost to buy franchise
- have to follow franchise model
- less flexability and con trol of franchise
- hve to pay a persentage of revenue (royalties) to the franchiosr on a regular basis
- lmited decision making
what is a social enterprise?
- organisaition that operates on a
- not profit basus
- or profit based in whoch is invested back into the services they offer
benefits of a soocial enterprise
- better image- public recognition and trust
- funding
- tax relief
drawbacks of a soocial enterprise
- hard to find voluntary workers
- cannot raise mooney through investemnets
what is a public coorporation?
- legal entities that are owned by government
company whose shares are traded freely on a stock exchange.
adv of public coorporation?
- provide employment for eveyone
- source of income for government
- provide products at cheap prices
disad of public coorporation?
- expensive to maintain and run
- political interference on their operations
- operate loss
- can be a waste of respurces
what is a multinantional corporation?
companies that have other companies outside its home country
what is a transnational corporation?
enterprise that operates around the world but not own any assets outide their home country
social enterprise is a n
not for profit business
multintional operate in more then
1 country
