Chapter 1 A - B Flashcards
Characteristics of business
Sole Trader
A sole trader is a business structure that is owned and operated by one individual
Unincorporated
Is a legal status of a business whereby the business owner and the business are viewed as the same legal entity
Unlimited liability
Is the personal legal responsibility a business owner has for an unincorporated business’s debt
Debt
Is the amount of money that an individual or business owes
Partnership
A partnership is a business structure that is owned by two to twenty owners
Partnership agreement
A partnership agreement outlines the roles and expectations of the partners in a business
Private limited company
A private limited company is an incorporated business structure that has at least one director and a maximum of 50 shareholders
Public listed company
A public listed company is an incorporated business that has an unlimited number of shareholders and lists and sells its shares on the ASX
Incorporated
A legal status of a company whereby the company is established as a separate legal entity to the shareholder/s
Director
A person or a group of people who are responsible for and in charge of making decisions for a company
Shareholders
Are the individuals or organizations who have purchased shares of a company and therefore are part-owners of the company
Shares
Are the portions of an incorporated business that can be bought and sold as a means for the business to gain revenue
Dividends
Are regular sums of money paid out to shareholders from a company’s profit
Company tax
Is the portion of profits a company pays to the government for public services
Limited liability
Is when shareholders are only liable to the extent of their original investment, meaning they are not personally responsible for the business debts
Capital
Is the resources that can be used for funding a business, such as cash, machinery, and equipment
Australian Securities Exchange (ASX)
Is the electronic market where Australian public company shares are bought and sold
Social Enterprise
A social enterprise is a type of business that aims to fulfill a community or environmental need by selling goods or services
Government Business Enterprise (GBE)
A government business enterprise (GBE) is a business that is owned and operated by the government
Public Sector
Is the part of the economy that is operated by the government
Business Objectives
Are the goals a business intends to achieve
Profit
Is total revenue earned minus total expenses incurred
Revenue
Is the total amount of money a business generates from its normal business activities
Expenses
Are the costs of operating a business
Market share
Is a business’s percentage of total sales within an industry
Capital gain
Is an increase in the value of a share, meaning an investor can sell their shares at a higher price than what they originally purchased them for
To fulfil a market need
Is when a business fills a gap in the market, which involves addressing customer needs that are currently unmet or underrepresented by other businesses in the same industry
Efficiency
Is how productively a business uses its resources when producing a good or service
Productivity
The number of goods or services that are produced compared to the number of resources used in the production process
Effectiveness
Is the extent to which a business achieves its stated objectives
