The Purpose And Nature Of Business Flashcards
What is a product ?
Anything that is capable of satisfying customer needs it is TANGIBLE and can be touched
Examples of a product
Cars, shampoo, xbox controllers, mobile phones
What is a Service
An act that a business person carries out in exchange for money
Examples of a service
- car wash
- dental treatment
- gardening
What is a sole trader
A self employed person who owns their own business
What are companies houses
Any limited company or partnership business has to register with Companies House. These records are public and there is usually a fee to register.
What is a deed of partnership
A document that is signed by all of the owners of a business setting out the terms they must abide by and their obligations as owners.
What are dividends
A sum of money paid regularly by a company to its shareholders out of its profits.
What are econimies of scale
Where the average costs (of production, distribution and sales) fall as the business increases the amount of product that it produces, distributes and sells.
What is grant
A grant is money given to a business, usually by the government or lottery fund, that does not need to be paid back.
What is hostile takeover
A takeover of one company (called the ‘target company’) by another (called the ‘acquirer’) that is accomplished without the agreement of the target company’s management. Instead, the acquirer approaches the company’s shareholders directly or fights to replace the management to get the takeover approved.
What is income tax
Tax that someone pays based on their personal income (the money that they earn).
What is limited liability
When the business owner or owners are only responsible for business debts up to the value of their financial investment in the business.
What are profits
The amount of money made after all costs are deducted.
What is share capital
The money raised when a business becomes a public limited company by offering shares in the business in return for capital.
