Types of business Flashcards
Micro Business
one that employs fewer than five people
what is a local business?
a local business has a restricted geographical spread, in summary, it only serves the surrounding area
Small Business
employs between 5 and 19 people
Medium Business
employs 20-199 people
Large Business
employs over 200 people
what is a national business?
a national business operates within a country
Classification of business depends on?
Number of employees, market share, ownership and who makes the decisions
what is a global business?
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
Primary industry
businesses involved in collection of natural resources
what are the four main legal structures businesses are involved in?
sole traders, partnerships, private companies, public companies
Quaternary industry
services that involve the transfer and processing of information and knowledge
Secondary industry
production of finished or semi-finished goods
Tertiary industry
performing a service
How does finance influence choice of legal structure?
the amount of finance is required to expand and what sources of funds are required
What factors influence legal structure?
Size, ownership, finance
How does size influence choice of legal structure?
As businesses expand, then the business may wish to seek the protection of limited liability
How does ownership influence choice of legal structure?
the control and ownership of the business the owner requires
Quinary industry
services that have traditionally been performed in the home
define a sole trader
a sole trader is a business that is owned and operated by one person and has unlimited liability
define a partnership
a partnership is a business that is owned and operated by between 2-20 people and has unlimited liability.
are all companies incorporated enterprises?
yes
what is a private company?
a private company has usually fewer than 50 shareholders and MUST have ‘proprietary limited’ (Pty Ltd) after its name
eg. cheese factor pty ltd
where are the shares for a public company listed?
australian securities exchange
what must a public company have in their name?
‘limited’ or ‘Ltd’
what does it mean when a business is incorporated?
a business that is incorporated becomes a separate legal entity from its owner(s)
how can partnerships be made?
verbally, in writing or by implication
what are government enterprises?
government enterprises are government-owned and operated, and provide essential community services
As a business expands, what structure does it normally move from?
Unincorporated structure to incorporated structure
