Type of a business Flashcards
SME
small to medium enterprise - fewer then 200 full time employees
Micro Business
fewer then 5 employees
home run
one person
small to little dominance
Local business
restricted geographical location
used by customers near by
small to medium
National business
increased range of products
run out of new customers - the domestic market becomes saturated
Global business
Multinational corporation
features in common such as finance assets technology standardisation
disagrees with shipping as you can’t sell damaged goods and it’s expensive
Classification of a industry
Primary – natural resources
Secondary – manufacturing industry
Tertiary – range of services
Quaternary - industry of transferring and processing information and knowledge
Quinary - Services traditionally done at home
Legal structure
Sole trader and partnership - unincorporated with unlimited liability
private company and public company - Inc with limited liability ( Your assets are separate to your business earnings)
sole trader (definition, ads and dis)
A sole trader is a business owned and operated by one person.
Advantages: No partner disputes and owner is in complete control
Disadvantages: personal unlimited liability difficult to operate if sick or unable
partnership (definition, ads and dis)
business run by two operaters
ads: Pools of funds, shared responsibility
dis: In a partnership personal assets are at risk, possible disputes which slow down production - inefficency
companies
All companies are incorporated enterprise meaning limited liability - you need to go through the ASIC
private companies
2 to 50 shareholders
small to medium size family own business
Pty.LTD
shares are not listed on ASX
Public companies
Larger market shares
shares sold on ASX every day without the company knowing
no Max shareholders
LTD
ads and dis about public company
ads: Easier to raise public finance, experience board of directors, Limited liability
dis: Cost of establishment, If it becomes too large in efficiencies will occur
ownership
If I know once complete control – sole trader
Private company would allow the owner with a high
degree of control also the protection of limited liability
The more shares owned the more ownership
Government enterprise (public sector)
Owned by the government not a public business government run meaning government decides the prices monopoly there is no other competition