Types of business

Question 1

Micro Business

Answer 1

one that employs fewer than five people

Question 2

what is a local business?

Answer 2

a local business has a restricted geographical spread, in summary, it only serves the surrounding area

Question 3

Small Business

Answer 3

employs between 5 and 19 people

Question 4

Medium Business

Answer 4

employs 20-199 people

Question 5

Large Business

Answer 5

employs over 200 people

Question 6

what is a national business?

Answer 6

a national business operates within a country

Question 7

Classification of business depends on?

Answer 7

Number of employees, market share, ownership and who makes the decisions

Question 8

what is a global business?

Answer 8

a global business is a large business with a home base in a country that operates partially owned or wholly owned businesses in other countries

Question 9

Primary industry

Answer 9

businesses involved in collection of natural resources

Question 10

what are the four main legal structures businesses are involved in?

Answer 10

sole traders, partnerships, private companies, public companies

Question 11

Quaternary industry

Answer 11

services that involve the transfer and processing of information and knowledge

Question 11

Secondary industry

Answer 11

production of finished or semi-finished goods

Question 11

Tertiary industry

Answer 11

performing a service

Question 11

How does finance influence choice of legal structure?

Answer 11

the amount of finance is required to expand and what sources of funds are required

Question 11

What factors influence legal structure?

Answer 11

Size, ownership, finance

Question 12

How does size influence choice of legal structure?

Answer 12

As businesses expand, then the business may wish to seek the protection of limited liability

Question 12

How does ownership influence choice of legal structure?

Answer 12

the control and ownership of the business the owner requires

Question 12

Quinary industry

Answer 12

services that have traditionally been performed in the home

Question 13

define a sole trader

Answer 13

a sole trader is a business that is owned and operated by one person and has unlimited liability

Question 14

define a partnership

Answer 14

a partnership is a business that is owned and operated by between 2-20 people and has unlimited liability.

Question 15

are all companies incorporated enterprises?

Answer 15

yes

Question 16

what is a private company?

Answer 16

a private company has usually fewer than 50 shareholders and MUST have ‘proprietary limited’ (Pty Ltd) after its name

eg. cheese factor pty ltd

Question 17

where are the shares for a public company listed?

Answer 17

australian securities exchange

Question 18

what must a public company have in their name?

Answer 18

‘limited’ or ‘Ltd’

Question 19

what does it mean when a business is incorporated?

Answer 19

a business that is incorporated becomes a separate legal entity from its owner(s)

Question 20

how can partnerships be made?

Answer 20

verbally, in writing or by implication

Question 21

what are government enterprises?

Answer 21

government enterprises are government-owned and operated, and provide essential community services

Question 22

As a business expands, what structure does it normally move from?

Answer 22

Unincorporated structure to incorporated structure