Forms of Businesses Flashcards
What is a business?
A business is any activity engaged in by one or more persons for the purpose of providing goods and/or services with the intention of making a profit.
Which two ways can be used to classify a business?
The way the capital is raised or ownership
The main activities undertaken
What is a sole trader business?
Assault radar is an individual running a business. It is a simplest and cheapest business structure. If you operate a business as a sole trader, you are the only owner and you control and manage the business. You are legally responsible for all aspects of the business.
What is the partnership business model?
A partnership is a form of business where two or more people (up to twenty people) share ownership, as well as responsibility for managing the company and the income or loss is the business generates.
What is a cooperative society?
A cooperative society is a voluntary association that start with the aim of the service of its members. It is a form of business by individuals belonging to the same class join their hands for the promotion of their common goals.
What is a company?
A company a corporation is a legal entity formed by a group of individuals to engage in and operate a business.
They could operate as a private limited company with a maximum of 50 shareholders.
They could operate as a public limited company with a minimum of seven shareholders.
Limited liability – if losses are incurred persons who have invested in the company only stand to lose that which they have invested.
Unlimited liability - if losses are incurred persons who have invested in the company may lose their personal belongings.
What is a nonprofit organisation?
A nonprofit organisation is a legal entity, which operates a seventh of society as a whole.
A nonprofit organisation can be in the form of trust, clubs, society, committee, et cetera. Nonprofit organisations cancel codes or services, but the main source revenue through donations, subscriptions or membership fees.
A nonprofit organisation, on the other hand, can seek donations from individuals, foundations and corporations.
