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Business Studies > types of business > Flashcards

types of business Flashcards

1
Q

define size, what are the sizes of businesses

A

size: about how big the company’s operations are
micro, small, medium, large, small the medium enterprises (SMEs)

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2
Q

define and give examples of a micro business

A

a business with fewer than five employees e.g. lawn and landscaping companies, shoemakers

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3
Q

define and give examples of a small business

A

a business with 5-19 employees e.g. corner store, local mechanic, hairdresser

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4
Q

define and give examples of a medium business

A

a business with 20-199 employees e.g. service club, hotel/motel, engineering factory

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5
Q

define and give examples of a large business

A

a business with 200 or more people e.g. woolworths, quantas, mcdonalds

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6
Q

define geographical spread

A

the presence of a business and the range of its products across a suburb, city, state or country, or the globe

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7
Q

define and give examples of a local business

A

a business that has a restricted geographical spread; it serves the surrounding area e.g. newsagent, corner store, hairdresser, mechanic, pharmacy

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8
Q

define and give examples of a national business

A

a business that operates within just one country e.g. Coles, Mecca, commonwealth bank, david jones

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9
Q

define and give examples of a global business

A

a large company that has branches in many different countries, can also be know as a multinational corporation e.g. coca-cola, mcdonalds, lg, toyota, westfield, google

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10
Q

define and give examples of a small to medium enterprise

A

firms with fewer than 200 full-time equivalent employees and/or less than $10 million turnover e.g. hair and beauty salons, dental practices, medical centres, bars, cafes, restaurants, gyms

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11
Q

What may push a national business to go global?

A

if a national business expands and increases sales, running out of new customers and the domestic market becomes saturated therefore wanting to export and sell its product in other countries

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12
Q

define industry

A

businesses that are involved in similar types of production

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13
Q

define and give examples of the primary industry

A

includes those business involved in the collection of natural resources e.g. framing, mining, fishing, grazing, forestry

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14
Q

define and give examples of the secondary industry

A

includes businesses that take a raw material and make it into a finished or semi-finished product e.g. heavy manufacturing, steel and car manufacturers, food processing, oil refining, energy generation

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15
Q

define and give examples of the tertiary industry

A

involves people performing a vast range of services for other people e.g. retailers, dentists, solicitors, banks, health workers

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16
Q

define and give examples of the quaternary industry

A

services that involve the transfer and processing of information and knowledge e.g. property, computing, financing, education, telecommunications

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17
Q

define and give examples of the quinary industry

A

all services that have traditionally been performed in the home e.g. hospitality, tourism, craft-based activities, childcare

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18
Q

what industry employs the most of the labour force and why

A

quaternary, due to the demand of those jobs

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19
Q

what industry employs the least of the labour force and why

A

primary, due to the development of technology

20
Q

what does the secondary industry do?

A

they take the output of firms in the primary sector (raw materials) and process it into a finished or semi-finished product

21
Q

define an unincorporated business

A

they have no separate legal existence from its owner(s) therefore the business and the owner(s) are the same —> this means it is a sole trader or partnership

22
Q

define an incorporated business

A

refers to the process companies go through to become a separate legal entity as it own legal entity and the business has taken on a life of its own —> this means it is a private or public company

23
Q

define a sole trader and examples

A

a business that is owned and operated by only one person e.g. handyman, hairdresser, local markets stall

24
Q

define unlimited liability

A

when the business owner is personally responsible for all the business’s debts, this may include selling personal assets such as property or motor vehicles, to pay for the liabilities of the business. this means legally they (gov) can take any personal items for the debts of the business

25
Q

what does a sole trader do?

A

-employ others to work for the business
-provide all the finances
-make all the decisions
-takes all the responsibility for the operations of the business

26
Q

what are the advantages of being a sole trader

A

-low cost of entry
-owner’s right to keep all profits
-only pay tax for personal income not company & personal income
-complete control

27
Q

what are the disadvantages of being a sole trader

A

-unlimited liability for business debts
-difficulty in raising finance for expansion
-difficult to operate if sick
-need to carry all loses

28
Q

define partnership with examples

A

a legal business structure that is owned and operated by between 2 and 20 people with the aim of making a profit e.g. medical practitioners, accountants, chemists, architects

29
Q

partnership advantages

A

-less costly startup than a company
-low startup costs
-shared responsibility and workload
-pooled funs and talent
-only pay tax for personal income not company & personal income

30
Q

partnership disadvantages

A

-unlimited liability
-when joining a partnership you are taking on the debts of other parties
-possibility of disputes
-difficulty in finding a suitable partner

31
Q

define limited liability

A

which means that the most money a shareholder can lose is the amount they paid for their shares

32
Q

what does it mean to have seperate legal entity?

A

means that the company can sue and be sued; it can lease, sell or own property; and it has perpetual succession (this means it will continue to exist even when the owners change)

33
Q

define proprietary (private) companies with examples

A

an incorporated business and usually has between 2 and 50 private shareholders e.g. IKEA, LEGO, rolex

34
Q

what make the business a private company?

A

-shareholders can only sell their shares to people approved of by the other directors
-must have the words ‘propriety limited’ aka ‘Pty Ltd”

35
Q

what is an advantage of having a private company?

A

is that shareholders have limited liability protection

36
Q

what is a disadvantage of having a private company?

A

closing a private company is complex as all shareholders of the company must agree to the end of the company

37
Q

what is a public company? with examples

A

the shares for public companies are listed on the Australian Securities Exchange and the general public may buy and sell shares of those companies e.g. quantas, commonwealth bank of Australia, kmart

38
Q

define government enterprise with examples

A

government-owned and operated business e.g. Australian Post, sydney water

39
Q

define privatisation

A

the process of transferring the ownership of the government business to the private sector

40
Q

what are the factors influencing choice of legal structure

A

size of business, ownership and finance

41
Q

which sizes of a business influence a particular legal structure?

A

micro/small=sole trader or partnership
small/medium=partnership or private company
growing medium= private company (for seeking limited liability)
large global=public

42
Q

How can ownership influence one’s choice of legal structure?

A

complete control of business=sole trader
shared ownership with others=partnership
maintain high degree of control and limited liability=private
sells shares to public and needs 50% to hold ownership=public

43
Q

how can finance influence a businesses choice of legal structure being sole trader or partnership

A

difficult to obtain adequate finance because of their exposure to risk (unlimited liability)

44
Q

how can finance influence a businesses choice of legal structure being private or public

A

businesses with lots of money have the ability to choose any legal structure but usually choose private or public

45
Q

what businesses have limited liability

A

incorporated businesses, private and public

46
Q

what is usually the size of private companies

A

small or medium

47
Q

what is usually the size of public companies

A

large

Business Studies (14 decks)

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