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A Level Business > Component 1 Booklet 2 > Flashcards

Component 1 Booklet 2 Flashcards

1
Q

What are the aims of a public sector business?

A
  • to provide services to the public
  • to benefit society
  • to improve efficiency

Examples-street lighting,the army,the police

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2
Q

What are Public Goods?

A

Good and Services which must be provided collectively because:

  • Non excludability-Goods can’t only be used by those who have paid for it
  • Non rivalry in consumption-the amount consumed by one person doesn’t reduce the availability of it to another

Example-Street lighting

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3
Q

What is a partnership?

A
  • Were more than one person owns the business
  • Can be anywhere between 2-20 partners
  • majority have unlimited liability
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4
Q

What is a Deed or Partnership?

A

A document that sets out the rules of partnership.

It can include:
•amount of capital each partner will invest
•How profits are shared
•methods of leaving the partnership

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5
Q

What is a Public Limited Company?(PLC)

A
  • widely known and nationally employ far more people than LTD’s
  • shares are bought and sold on the stock exchange.
  • needs to have a minimum of £50,000 share capital.
  • legally have to publish details of their accounts
  • Divorce of ownership and control can occur

Example-Marks and Spencer’s was a LTD before floating on the stock market(became PLC)

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6
Q

What is a limited company?

A
  • owned by shareholders
  • run by board of directors
  • have limited liability
  • can own property and other assets
  • can enter into contracts
  • can sue and be sued
  • can borrow and lend money
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7
Q

What is a Social Enterprise?

A
  • A business with primarily social objectives
  • Profits are usually reinvested,rather than being driven by the need to maximise profit
  • NOT a charity-it’s a proper business that makes its money in a socially responsible way

Example-Jamie Oliver’s fifteen restaurant-purpose is to empower young people who need a second chance.

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8
Q

What is required to set up a limited company?

A

A memorandum of Association and Articles of Association

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9
Q

What is a Memorandum of Association?

A

•Sets out the company name,where the registered office is and what the business will do

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10
Q

What are Articles of Association?

A

•sets out the rules for how the business will be run and how directors will be appointed

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11
Q

What is a public sector business?

A

A business owned and controlled by the government

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12
Q

What are the aims of a private sector business?

A
  • to provide and manufacture goods
  • to make profit
  • to gain market share
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13
Q

What is a Private Sector Business?

A

Businesses set up by individuals or groups of individuals

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14
Q

What are merit goods?

A

•Goods and services that the government feels people will underconsume and therefore they need to be provided for free so that consumption doesn’t depend on ability to pay

Example-Education

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15
Q

What is a Sole Trader?

A
  • owned by one person
  • can employ any number of employees
  • have unlimited liability
  • have limited access to sources of funds.They usually use:bank loans,personal savings or loans from family/friends

Examples-Plumber,Corner ships or local takeaways

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16
Q

What is unlimited liability?

A

The owners are personally liable for the debts of the business and there’s no limit to this responsibility(they will have to sell personal possessions to pay debt)

17
Q

What is limited liability?

A

Companies are responsible for the money they owe but personal possessions of the owner are safe.

18
Q

What is a Worker Co operative?

A
  • owned and controlled by the employees who share the profits
  • each member has an equal say
  • most are Ltds however some are partnerships.
19
Q

What is a consumer co operative?

A
  • owned and controlled by members who are consumers
  • prices are set at the level of competitors
  • any profit is given back to members depending on how much they have spent in the shop
20
Q

What is a Charity?

A
  • A charity is an organisation that is registered and regulated by the charities commission.
  • Trustees are appointed to run the charity and put the organisations aims into practise
  • NOT for profit
21
Q

What is a Society?

A

An organisation that is traditionally founded by groups of people who share their resources to gain rewards

Example-Building societies

22
Q

What is a private limited company?(LTD)

A
  • owned by shareholders
  • sell shares privately. (all shareholders must agree any sales)
  • often owned by families or friends
  • has to be at least 2 shareholders who are also directors of the company

Example-Warburtons which is owned by the Warburton family

23
Q

What are barriers to entry?

A

Things that would stop new companies entering the market

Examples-
•high set up costs
•high levels of competition from large established businesses

A Level Business (10 decks)

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