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Bussiness Studies (GCSE) > Topic 3-Business Ownersip > Flashcards

Topic 3-Business Ownersip Flashcards

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1
Q

Micro business

A
  • 95% of firms are micro
  • Less than 10 employees
  • Turnover less €2m(£1.7m)
  • Balance sheet total less than €2m
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2
Q

Small business

A
  • Less than than 50 employees
  • Turnover less than €10m(5.6m)
  • Balance sheet total less than €10m
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3
Q

Medium business

A
  • Less than 250 employees
  • Turnover less than €50(£22.8m)
  • Balance total less than €43m
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4
Q

Large business

A
  • More than 250 employees
  • Turnover more €50m(£22.8m)
  • Balance total sheet more than €43
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5
Q

Private sector

A

Businesses owned and controlled by private individuals.The main aim is usually to make a profit

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6
Q

Unlimited liability

A
  • The owner and the business have the same legal identity
  • If the business fails the owner has to pay all debts of the business including having to sell personal possessions
  • Sole traders and partnerships have unlimited liability
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7
Q

Limited liability

A
  • The owner and the business have a separate legal identity
  • If the business fails the owner or owners only lose what they have pit into the business.
  • Private and Public Limited companies have this.
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8
Q

Sole trader

A
  • A business owned and controlled by one person
  • Typical examples can be found in hairdressing,plumbing and dressmaking
  • It is the most common type of business organisation(1/4 of firms)
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9
Q

Advantages of being a Sole Trader

A
  • Make all the decisions
  • Easy/cheap to set up
  • Keep all the profits
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10
Q

Disadvantages of being a Sole Trader

A
  • Unlimited liability
  • No shared responsibility
  • Lack of Capital
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11
Q

Partnership

A
  • A business owned and controlled by between 2 and 20 partners who contribute capital and expertise to the enterprise
  • The rules of the partnership are outlined in the Deed of Partnership
  • Typical firms that are run in this way are doctors,dentists and accountants
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12
Q

Advantages of a partnership

A
  • More specialisation therefore more expertise
  • Shared responsibility therefore less pressure
  • More capital therefore easier to grow
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13
Q

Disadvantages of a partnership

A
  • Share the profits therefore less money for yourself
  • Shared decision making therefore if one partner makes a mistake it affects everyone as well
  • Unlimited liability
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14
Q

A limited company

A
  • A company is a group is a group of people who have joined together to form a business
  • These people own shares in the company
  • Owned by the shareholders
  • Run by the board of directors who are voted on at the AGM(annual general meeting) (usually shareholders)
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15
Q

How to form a limited company

A
  • All limited companies have to be registered with the registrar of companies
  • This is a more complicated and lengthy process and a number of documents have to be produced including:
    • Memorandum of Association
    • Articles of Association
    • Trading Certificate
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16
Q

Private limited company

A
  • A business owned by shareholders and controlled by a Board of Directors
  • Shareholders will be family and friends
  • Shares are not available to everyone
  • The company will have will have the letters ltd after its name
17
Q

Advantages of a limited company

A
  • Limited liability
  • Easier/Cheaper to set up than a PLC
  • Economies of scale
18
Q

Disadvantages of a limited company

A
  • Publish more information than a sole trader or partnership
  • Shares can only be bought by family and friends
  • Shareholders receive a share of the profits in dividends
19
Q

Public Limited Company

A
  • A business that is owned by shareholders and controlled by a board of directors
  • Shareholders can be anyone as they are traded freely on the stock market
  • It will have the letters plc after its name
20
Q

Advantages of a Public limited company

A
  • Limited liability
  • Easier to gain finance by selling shares on the stock exchange
  • Economies of scale
21
Q

Disadvantages of a Public Limited Company

A
  • Expensive to set up
  • More vulnerable to a takeover
  • Slow decision making
22
Q

Franchise

A

This is where as franchisor gives franchisee permission to seek their well know product.Examples include McDonalds,subway,The body shop.

23
Q

Franchisor

A

The business that gives permission to the franchisee to sell the product.Franchising allows them to grow more quickly

24
Q

Advantages to the Franchisor

A
  • Easier and quicker to expand
  • Profit from sales
  • Highly motivated franchisees
25
Q

Disadvantages to the franchisor

A
  • Loses management of the day to day running of the outlet

- A poor franchisee can damage the reputation of the whole business

26
Q

Franchisee

A

The individual who is setting up a business selling the already established product.The advantage is that because it is already established there is less risk

27
Q

Advantages to the franchisee

A
  • Reduced risks
  • Protected market area
  • Training and support from the franchisor
28
Q

Disadvantages to the Franchisee

A
  • Does not have complete control of the running of the business
  • Does not have the right to sell the business without the agreement from the franchisor
  • Royalties have to be paid to the franchisor

Bussiness Studies (GCSE) (11 decks)

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