chapter 4 business Flashcards
business name registration
ASIC responsible, owner must have an ABN to apply for a business name
Domain name
the address of a website on the internet, more easy to find and prevents from other businesses from registering a similar domain name that may confuse customers
Taxation
By which the government finances its expenditures by collecting money from individuals and businesses
Australian Taxation Office (ATO)
Government body in charge of administrating and collecting tax for federal government
TFN
Unique identifier, manages tax, and used by ATO
why do you need business name registration?
Gives you full rights and prevents from others registering same name as you
Pay as you go withholding(payg)
taken from salary, imposed on employees
GST
imposed on suppliers, tax of 10%, only required if they earn 75k or more in a year
fringe benefit tax
tax on provision of benefit, such as a low interest loan
stamp duty
placed in a document that gives evidence to transactions, such as the purchase of a property
land tax
annually levied on the owner of the land
business activity statement
form submitted to ATO by business entities to report tax obligations
Local governments have control over
land zoning, fire regulation, parking regulation, new development regulation, fire regulation
(local gov requirements)
zoning regulation
purpose for which a building or land can b used for a particular reason or business, ensuring business activities dont infringe on residential areas.
(local gov requirements)
Health regulation
Ensures owner maintains health standards and meets safety and hygiene requirements
(trade practice legislation)
work health and safety reg
oh&s act 2004
(local gov requirements)
worksafe insurance
aims to reduce workplace injuries and support workers by covering replacemet of lost income, medican and legal cost
(local gov requirements)
code of conduct
written set of guidelines with the aim of helping a business achieve its standards
consumer protection & fair competition - Aus competition and consumer commission:
gov body that enforces competition and consumer act 2010, promoting fair and safe trade
(Anti competitive practices)
list 5 strictly controlled or prohibited laws
- cartel
- misuse of market power
- exclusive dealing
- resale price maintenance
- mergers and acquisitions
(Anti competitive practices)
Cartel
groups of businesses working together to control market by setting prices and rigging bids to increase their profits
(Anti competitive practices)
Misuse of market power
Using its dominant position to take advantage of its customers
(Anti competitive practices)
Exclusive dealing
When one business trading with another, imposes restrictions in dealing with other companies
(Anti competitive practices)
Resale price maintenance
when suppliers set their prices at which retailers will sell their products
Mergers and acquisitions
Merger: when 2 companies or more fuse together to create one company
Acquisition: When one company takes over another company
- leads to reduced market
(Anti competitive practices)
name 8 illegal acts
- misleading/deceptive conduct
- unconscionable conduct
- false/misleading representations of G&S
- offering prizes in connections to g&s then not providing it
- bait advertising
- pyramid scheme
- referral selling
- unfair contract terms
(Anti competitive practices)
8 illegal acts
Misleading/deceptive conduct
making false claims
(Anti competitive practices)
name 8 illegal acts
unfair contract terms
unfair and unreasonable, taking advantage of customers
(Anti competitive practices)
name 8 illegal acts
false/misleding representations of g&s
making false statements of products
(Anti competitive practices)
name 8 illegal acts
bait advertising
advertising goods on discount which results in attracting cutomers, only to find out that they are limited or arent in stock
(Anti competitive practices)
name 3 lawful acts
- unsolicited consumer agreement
- lay-by agreement
- proof of transaction
(Anti competitive practices)
name 3 lawful acts
unsolicited consumer agreement
when a company tries to sell a good or service without the consumer asking for it
(Anti competitive practices)
name 3 lawful acts
lay-by agreement
a way for customers to pay for a poduct or service over time
(Anti competitive practices)
name 3 lawful acts
proof of transaction
reciepts for all transactions
(role of external professionals when establishing a business)
list 6
- freelancer
- bookkeepers
- sales professionals
- market consultants
- info technological technicians (it)
- recruiters
(role of external professionals when establishing a business)
freelancer
independent workers who charge businesses or individuals for work on a per job basis
(role of external professionals when establishing a business)
bookkeepers
assist a business in keeping and processing a business’s financial records
(role of external professionals when establishing a business)
recruiters
works to match qualified individuals with open positions
(role of external professionals when establishing a business)
sales professional
trained in finding and persuading people to consume a product
(role of external professionals when establishing a business)
marketing consultants
responsible for raising awareness of a business’s products and brands with their target markets
(role of external professionals when establishing a business)
Info technological technicians
exists to support businesses in the set up of software, programs and services, as well as trouble shooting problems
highly recommended that transactions for businesses is made from separate accounts because…
- separate entity: records transactions of the business separately to its owner
- easier to manage and monitor financial performance
- easier to calculate business expenses
(factors to consider when choosing right bank account)
list 5
- bank fees
- interest rates
- overdraft facilities
- credit cards
- convinience and support
(factors to consider when choosing right bank account)
bank fees
some banks may charge hidden fees
(factors to consider when choosing right bank account)
interest rates
will determine how much money a business will earn on the amount of money they have in the bank account
(The higher the interest rate, the faster your hard-earned savings will grow)
The higher the interest rate, the faster your hard-earned savings will grow
overdraft facility
some may allow a business to withdraw more money than they have in their bank accounts
The higher the interest rate, the faster your hard-earned savings will grow
credit cards
max amount that can be used, the interest rates on unpaid balances
The higher the interest rate, the faster your hard-earned savings will grow
convenience and support
ease burden of running a business
(financial control system)
list 5
- budgeting
2.cash flow - auditing
- inventory control
- control of account recievable
(financial control system)
budgeting
establishes the businesses financial performance for a given period of time in the future
(financial control system)
cash flow
needs cash as a payment for goods and services to keep the business operating and booming
(financial control system)
control of account receivable
the outstanding payment a business is owed by its customers
(financial control system)
inventory control
maintains stock
(financial control system)
auditing
process of testing and evaluating a businesses accounting and internal control which could also provide feedback
(record keeping strategies)
list 4
- source doc
- income statement
- cashbook
- balance sheet
(record keeping strategies)
source doc
provides evidence of financial transactions and basic data such as addresses and names of parties involved, nature of transaction, and the amount of money
(record keeping strategies)
cash book
summary of a business’s cash reciepts and payments, keeping control on cash and monitoring cash flow
(record keeping strategies)
income statement
helps business calculate how much money it has made over a period of time
(record keeping strategies)
balance sheet
shows a business’s assets, liability and financial position
(choosing appropriate suppliers)
what is procurement?
process of searching and selecting suppliers, establishing payment terms, negotiating contracts and purchasing of resources that are vital for maintaining production of the business’s goods and services
(choosing appropriate suppliers)
list 4
- price
- quality
3.reliability - csr
(choosing appropriate suppliers)
price
keep cost low to remain profitable
(choosing appropriate suppliers)
quality
must inspect goods of its suppliers before commiting
(choosing appropriate suppliers)
reliability
choosing appropriate suppliers who are constantly delivering goods goods on time, if not reduced sales and reputation may suffer
(choosing appropriate suppliers)
CSR
taking in consideration of env, social and economic factors
social: labour conditions in manufactuing
economic: cost which meet csr req, economic growth
env: if theres waste or pollution and how much energy and water is being used
policy:
a written set of broad guidelines to be followed by all employees
procedure:
a series of actions that enables a policy to be put into practice
global issues and affects
- can create opportunities
- increased competition
- emerging markets
- reputation risks
these could include:oversease suppliers, customers, oversease retailers
customer guarantees
right to return faulty goods
right to cancel contracts
right to recieve refund or replacement for faulty goods
