forms of business Flashcards
sole trader
this is a person who owns and runs his or her own business
private limited company
this is a company formed when between 1-50 people put together money to start a new business with limited liability
limited liability
- this means that if a private limited company goes bankrupt (has debts they are unable to pay back)
- the shareholders will only lose the amount they have invested in the company
unlimited liability
- this means that a sole trader is responsible for all the debts of the business, they must pay back all the debts even if this means they must sell their company/personal possessions
co-operative business
this is an organisation formed by people who join together to achieve a particular objective that they could not achieve on their own
state-sponsored bodies
these are companies owned by the government or the state
privatisation
this is the term used to describe the sale of a semi-state company by the governemnt
3 sources of finance
- short
- mid
- long
short term must be paid back within
1 year
long term must be paid back within
5 years
medium term must be paid back within
1-5 years
example of short term
bank overdraft, trade credit
example of medium term
hire purchase, leasing
example of long term
gants, debentures, equity
production options
- job
- batch
- mass
job production
- suitable for specialized work
- each product is individual and unique
- expensive to buy
- made by a very skillful worker
Eg. wedding dress
mass production
- involves making a product continuously, 24 hours a day, 7 days a week, 365 days of the year
- only suitable for products that are in continuous demand by consumers
- the product is the same for all customers
- mainly uses machines than workers- very specialized
- unskilled workers on assembly line
- lowest cost- cheapest
E.g Toilet rolls.
batch production
- involves making a large number of products all in one go (prodcution line)
- the product is the same for all customers.
- it is made in advance and ready for the customer when she comes into the shop
- cheaper due to the economies of scale.
- uses workers who are not highly skilled.
E.g. newspapers, books, Leaving Cert papers.
