Term
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Definition
| Extraction of raw materials |
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Term
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Definition
| Takes the raw materials from the primary sector and turns them into a finished good |
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Term
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Definition
| Sells finished goods and or services |
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Term
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Definition
| Organisations that are owned and controlled by private individuals |
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Term
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Definition
| An organisation that is owned and controlled by the government |
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Term
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Definition
| Government funds businesses that are in the public/private sector |
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Term
| Four aims of the private sector |
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Definition
-Survival
-Growth
-Increasing market share
-Meeting the needs of shareholders |
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Term
| Four aims of the public sector |
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Definition
-Increased employment
-Providing quality care
-Protecting & Serve
-Providing a service |
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Term
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Definition
| A country with a combination of private and public organisations |
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Term
| What is a planned economy? |
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Definition
| Where they only allow private sector businesses to be obedient to the state. Meaning almost all businesses are public sector |
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Term
| What is a free market economy? |
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Definition
| Where the state allows for free trade and permits the business to act in the way the choose. Including not paying tax or very low amounts. Meaning there is no public sector. |
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Term
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Definition
| The business and the owners are the same legal entity |
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Term
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Definition
| The business and that owner are separate legal entities |
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Term
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Definition
| The owners are personally responsible for any debts of the business. (They may have to sell their personal assets) |
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Term
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Definition
| The owners only lose the investments they have already made in the business |
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Term
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Definition
| A person who is the exclusive owner of a business |
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Term
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Definition
| A formal agreement between 2 - 20 people to manage and share a business |
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Term
Sole trader:
Type of ownership? |
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Definition
-Owned by a signal individual
-Unincorporated |
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Term
Sole trader:
Legal formalities? |
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Definition
-Register with the tax office
-Pay tax directly
-Pay income based on earnings
-Still have to pay VAT |
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Term
Sole trader:
Type of liability |
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Definition
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Term
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Definition
-Zero start-up costs (in the UK)
-Financed by; Own funds, family, friends, banks
-They keep 100% of the profit |
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Term
| Four advantages of a sole trader |
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Definition
-Easy to set up (no legal formalities)
-Owner has complete control
-Owner keeps all the profit
-Owner can choose times and patterns to work
-Can establish close relations with staff
-Business can be based on the interests or skills of the owner |
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Term
| Four disadvantages of a sole trader |
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Definition
-Unlimited liability
-Intense competition from larger firms
-Difficult to raise additional capital
-Long hours
-Lack of continuity |
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Term
Partnership:
Type of Ownership? |
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Definition
-Between 2 to 20 partners
-Unincorporated |
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Term
Partnership:
Legal formalities? |
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Definition
-Register with the tax office
-Pay tax directly
-Pay income based on earnings
-Still have to pay VAT
-Partnership agreement (Contract between partners) |
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Term
Partnership:
Type of liability? |
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Definition
-Unlimited (However debt is shared between partners)
-Some partnerships can become LLP's (Limited liability partners) |
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Term
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Definition
-Zero start-up costs (in the UK)
-Financed by; Own funds, family, friends, banks
-Can be sleeping partners (partners who invest without working) |
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