1.4 Choosing the Appropriate Legal Structure Flashcards Preview

GCSE Business Studies Unit 1 > 1.4 Choosing the Appropriate Legal Structure > Flashcards

Flashcards in 1.4 Choosing the Appropriate Legal Structure Deck (14)
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1

Give the meaning of a Stakeholder

An individual or a group of people affected by the business

2

What is a Internal Stakeholder?

People that work inside the business

3

What is a External Stakeholder?

People that work outside the business

4

Give examples of a Internal Stakeholders and describe what they do

Owners:
They are the most important Stakeholders as they decide what happens in the business. Good or Bad decisions depend on what they decide

Managers:
They make the decisions on whether the employees get promotions or bonuses

Workers/Employees:
They are interested in their job security and promotion prospects.
This is improved if the firm is profitable and growing.
Employees would want a decent wage as well as good working conditions.

5

Give examples of External Stakeholders and describe what they do

Suppliers:
This is where the business buys raw materials from

Customers:
The amount of customers will depend on the quality of customer service

Local Area:
They create more noise, traffic and pollution

Government:
If a business succeeds, they would make more profit so more taxes are paid to the Government

Shareholders:
Share prices goes up

6

What is a Sole Trader?

An individual that sets up a business on their own

7

What is a Partnership?

A group of individuals that set up a business and work together

8

Give the Benefits and Drawbacks of a Sole Trader

Benefits:

Easy to set up
Small Capital Investment means reduced start up costs
Freedom to make decisions

Drawbacks:

Responsibility
Long Hours
Unlimited Liability

9

Give the Benefits and Drawbacks of a Partnership

Benefits:

There is someone to consult on with Business decisions
Shared Expertise
Share the Investment
Share Workload
Share ideas

Drawbacks:

Share Profit
Shared Responsibility
Unlimited Liability

10

What is the definition of a company?

A type of business owned by shareholders

11

What do owners of companies have?

Limited Liability

12

What is Limited Liability?

The company is liable for the debts. NOT its owners

13

What happens if a company fails?

The shareholders loose their original investment

14

What can't Private Limited Companies do?

The owners can't advertise the sales of their shares and it has to be done privately