Readings Flashcards
What is a business?
Offers goods or a service in exchange for payment- expect to make an income from this. can be for-profit or not-for-profit entities.
What is an organisation?
An organised group of people with a shared goal or objective. Able to achieve objectives that could not be done by one person or a group of people
Although organisations can vary, what three things do they have in common?
people, objectives, structure.
What are the three main ways to categorise a business?
size, ownership, industry sector
Why do we not classify businesses by profit
would exclude Not-for-profits
What are the two most common ways to classify a business?
number of employees and annual turnover
How does the European Commission define a large enterprise?
250 employees or more, annual turnover over €50 million
How does the European Commission define Medium-sized enterprises?
employ fewer than 250 employees, annual turnover over under €50 million
How does the E.C define a small enterprise?
employ less than 50 , annual turnover less than €10 million
How does the E.C define micro enterprises?
Employ less than 10 people, annual turnover under €2 million
What are SME’s
Small and medium businesses are the collective of businesses with fewer than 250 employees
In what ways are small and large businesses alike?
offer services/ goods that are in demand. need to be able to cover expenses and make a profit. Both need qualified and motivated staff.
What are the 3 sectors of industry
Primary, secondary and tertiary
What is the 4th sector?
an upcoming sector- made up of intellectual activities such as education
What is the primary sector
extracting and harvesting natural resources, e.g mining, fishing and agriculture
what is the secondary sector
The processing industry- takes resources from the primary sector and does more with them. e.g manufacturing, construction, processing foods
what is the tertiary sector
provides services such as retail, financial services and entertainment
What is a sole trader?
Run by and as an individual. keep all the businesses profits. Are personally responsible for any losses that the business makes. Sole traders can take on employees- the term implies that they own the business alone not that they work alone.
what is a limited company?
An organisation set up by its owners to run their business. A limited company is a legal person- it has legal rights and obligations in itself, which are independent from the rights and obligations of its owners as individuals. A limited company can own property.
A limited company’s finances are separate from its owners. Any profit made after tax belongs to the company. The company can share its profits among all the owners.
Limited companies have members- the people who own the shares.
what is the difference between a public and private limited company?
Private- shares can only be brought with the approval of the current owner may be invited to invest
Public - PLC’s shares are traded in the stock market- anyone can buy them.
What is a business partnership?
When a business’s ownership is shared by two or more people. Profits from a partnership are shared between the partners and then each partner pays tax on their share.
What is the difference between a general and a limited partnership?
General partnerships- all partners are personally responsible for the business
Limited partnership- partners are not personally liable if the business incurs and debts.
