Economic Sectors and legal structure and size

Question 0

What are the 4 business sectors

Answer 0

Primary
Secondary
Tertiary
Quaternary

Question 1

How can you classify a business

Answer 1

By its size
Legal structure
And activities its involved with

Question 2

What is a chain of production

Answer 2

The process in which a product goes through each sector in order to reach the consumer

Question 3

What does the primary sector do

Answer 3

Extracts raw materials and natural resources

Question 4

What does the secondary sector do

Answer 4

Turns the raw materials into products

Question 5

What does the tertiary sector do

Answer 5

Sells the product or service to another business/consumer

Question 6

What does the Quaternary sector do

Answer 6

Consists of it products

Question 7

How do you measure the size of a business

Answer 7

Value
Number of employees
Sales turnover
Level of independence

Question 8

What are the 4 sizes a business can be

Answer 8

Micro- earns less than 1.6m, less than 10 employees

Small- earns less than 8m, less than 50 employees

Medium- earns less than 40m, less than 250 employees

Larger- earns more than 40m, more than 259 employees

Question 9

What is nationalisation

Answer 9

Where the government takes over the running of a business

Question 10

What is privatisation

Answer 10

Selling state owned industries to the private sector

Question 11

What is the public sector

Answer 11

This is the part of the economy that is owned and controlled by the state or government

Question 12

What is the private sector

Answer 12

This is part of the Economy that is owned and controlled by individuals

Question 13

What is a sole trader and what liability does it have and two advantages and two disadvantages

Answer 13

It's is when a person runs and owns there own business
It's the easiest type of business
Unlimited liability
Advantages
Easy to set up
All profits kept
Disadvantages 
Unlimited liability 
High risk of failure
Long hours of work

Question 14

What is a partnership and what liability does it have and two advantages and two disadvantages

Answer 14

It’s a business made up of 2-20 partners
It’s basically the same as a sole trader but with multiple owners
It can have sleeping partners who just give funds and don’t work
Unlimited liability
Advantages
Easy to set up
Partners keep profits
Disadvantages
Unlimited liability
Conflicts can occur

Question 15

What is a public limited company (Plc)and what liability does it have and two advantages and two disadvantages

Answer 15

It's a company where shares are sold on the stock exchange, and shareholders have limited liability 
It's accounts must be published for everyone to see
Advantages 
Sell shares to anyone 
Limited liability 
Disadvantages
Have to share profits due to dividends 
Not all decisions made by owners

Question 16

What is a private limited company (ltd)and what liability does it have and two advantages and two disadvantages

Answer 16

A private limited company consists of at least 2 shareholders and shares are sold privately to friends and family.
Limited liability
Advantages
Limited liability
Can get funds by selling shares (sell them to who the business wants to)
Disadvantages
Can’t be sold on the market, so harder to sell in aspects
Have to share profits because of dividends

Question 17

What is a franchise and what liability does it have and two advantages and two disadvantages for each franchise and franchisee

Answer 17

It’s a large company that allows the use of the brand name for a smaller business, franchiser quips the small business for a cost
The franchisee must make regular payments to the franchiser
Limited liability for the franchiser
Unlimited liability for the franchisee

Advantages
Franchisee
Better chance of success for franchisee
Support if available

Franchise
More profits through royalty payments
Become even more well known

Disadvantages
Franchisee
Franchise brand can be removed
Have to make royalty payments

Franchise
Have to provide support to new business which may be difficult if they don’t have any sense of business