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Entrepreneurship > Module 1 > Flashcards

Module 1 Flashcards

1
Q

Sole trader

A

A business venture ran by one person who has full control of the business. They may employ other people to carry out different functions. They are also responsible for allocating all necessary resources to run the business.

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2
Q

What are some advantages of sole trader?

A
  1. Simple to form due to few legal requirements
  2. Decision-making is quick due to one person having total control and do not need to consult with any board members
  3. Profits are not shared
  4. Owner is motivated since he’s self-employed
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3
Q

What are some disadvantages of sole traders?

A
  1. Responsible for providing all capital (hard to obtain loan and time consuming)
  2. Unlimited liability: if cannot pay debt, they may lose personal assets
  3. Long working hours: has all the responsibilities (may also avoid employing to cut costs)
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4
Q

Partnership

A

A business where 2 to 20 people work together towards a common goal of making profit.
The partnership is governed by a legally binding agreement called partnership deed.

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5
Q

What are advantages of partnerships?

A
  1. More pooling of resources (especially financial and management resources)
  2. Better work/life balance: the responsibilities are shared
  3. Specialization (partners can specialize in a given afea)
  4. Better decision making (different perspectives)
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6
Q

What are disadvantages of partnerships?

A
  1. Disagreements
  2. Decision-making is slower due to a number of partners
  3. Unlimited liability
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7
Q

What is a limited partnership?

A

A limited partnership is when two or more partners go into business together, but the limited partners are only liable up to the amount of their investment.

It consists of a general partner and limited partner. The general partner oversees and runs the business while limited partners do not partake in managing the business.
They only invest in the business (silent partner).

General partner: unlimited liability
Limited partner: limited liability

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8
Q

Franchise

A

Franchise is a business that was granted a right to market and sell goods from an already established business.

It involves a franchisor, one who establishes and trademarks a business, and the franchisee, one who pays the franchisor royalty fees to be under the business’s name and system.

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9
Q

What are advantages of franchise?

A

For franchisor:
1. Increase market share
2. Additional Source of revenue

For franchisee:
1. Training is provided by parent company
2. Already establish a position in the market and gain market share
3. Advertisement cost is reduced
4. Less likely to fail

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10
Q

What are disadvantages of franchises?

A
  1. Lack of control and cannot use entrepreneurial skills and limited creative experience
  2. Pays royalties fees
  3. Must abide by terms and conditions of contract
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11
Q

Limited Liability Company/ Cooperation (LLC)

A

a business entity that protects individuals from being liable for the company’s financial losses and debt liabilities.

It contains shareholder and managed by a broad of directors. Each member is liable up to the amount they contributed in shares.

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12
Q

What are some advantages of LLC?

A
  1. Limited liability: helping protect against personal liability and personal assets of LLC members, in the case of legal consequences.
    2.
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13
Q

What are some disadvantages of LLC?

A
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14
Q

Private company

A
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15
Q

Non-Governmental Organizations

A

An organization established by a group of voluntary individuals which are formed at local, national and internet level.

They do not aim to generate a profit and is formed to:
- provide humanitarian functions
- offer aid and relief in time of disastera
- addresses social issues

They are not formed by the government nor answer to them.

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16
Q

What are examples of NGOs?

A
  1. Community based organizations (CBO)
  2. Social enterprises
  3. Charities
  4. Foundations
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17
Q

Cooperative Societies

A

A form of a business consisting of a voluntary group of individuals who work together to promote economic interest.

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18
Q

What are advantages of cooperatives?

A
  1. Limited liability
  2. Profit is shared among members
  3. Members have say in the business operations (voting)
  4. Economies of scale
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19
Q

What are disadvantages of cooperatives?

A
  1. Minimal profit
  2. Conflict
  3. Decision-making is long
20
Q

Types of cooperatives

A
  1. Consumer cooperative: provide members with needed items at reduced profits
  2. Producer cooperatives: share productions and altering facilities (Econ of scales)
  3. Worker cooperative: provide employment, contribute through purchasing shares
21
Q

State-owned enterprises

A

A business entity created by the government to partake in commercial activities.

22
Q

Why is registering a business important?

A
  1. Access to loans and grants
  2. Build consumer confidence
  3. Obtain contracts
  4. Open bank accounts in business name
23
Q

Why is labor laws important?

A

It aims to protect its workers’ rights and highlights the employers’ obligations (moral actions) and responsibilities.

24
Q

What are some labor laws?

A

Contract laws, legal contract, sales contract, leases

25
Q

Labor laws

A

Laws that deal with the legal rights of working people and the organization they work for

26
Q

Examples of personnel laws

A

Hiring/firing policies, income tax, general consumption tax, property tax, collective bargaining

27
Q

Why is occupational safety and health laws important?

A

Reduces injuries or accidents by identifying and mitigating hazards of workers and consumers

  • Low labor turnover
  • improve employee Morale (safe environment = less stress)
  • improve productivity
  • reduce cost of worker’s compensation
28
Q

Examples of occupational safety and health laws

A

Consumer
Institutions

29
Q

International Standards and Regulation

A

Quality management standard to help work more efficiently and reduce product failure

30
Q

Intellectual property protection

A

The rights govern to persons over the creations of their mind

31
Q

Patent

A

Protects inventions

32
Q

Copyright

A

A property right granted to authors or literary and artistic work

It protects the work from authorized duplication for commercial purposes.

33
Q

Trade marks

A

Any distinctive word,name, symbol or device (appearance) that an entity used to distinguish themselves

34
Q

Trade secret

A

Any confidential information that gives a business a competitive edge

35
Q

Open innovation

A

The practice of businesses outsourcing ideas from external sources to drive innovation

36
Q

Environmental stewardship

A

The response used and protection of the natural environment through conservation and sustainable practices

37
Q

Tax

A

Mandatory contribution imposed on individuals and business by the government

38
Q

Examples of international standards and regulations

A

ISO
duty of care
Occupational, Safety and Health Administration

39
Q

Social Entrepreneurship

A

The process of creating social impact and value by organizing resources in a creative and innovative way to meet social needs

40
Q

Business ethics

A

Moral principles that act as guidelines for the way a business conducts itself and transactions

Eg. data protection, workplace diversity,

41
Q

Business integrity

A

The act of conducting business practices by following moral and ethical framework

42
Q

Code of ethics

A

A statement of specific rules and standards for a variety of situations which guides the employee’s behavior

43
Q

Business etiquette

A

Set of rules that govern the way those in business interact with one another, customer, suppliers and partners

44
Q

Corporate social responsibility

A

Business mode that helps a company be socially accountable to itself, its stakeholders and the environment

45
Q

Good corporate governance

A

The process in building an environment of trust, transparency and accountability for fostering long term investments and business integrity

Entrepreneurship (1 decks)

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