Business Structure Flashcards
Private limited company
A business that is owned by the shareholders of the business and the company that cannot sell shares to the public.
Public limited company
A business whose shares can be sold or bought by the public.
Initial public offering
An offer to the public to buy shares in a public limited company.
Economic sectors
Primary, Secondary,Tertiary and Quaternary
(Quaternary provides info services, web design, ICT,RND etc.)
Benefits of Industrialisation
-Total output increases
-Increased exports
-More jobs
-More tax to govt
-Value added to country’s output of raw materials
Limitations of industrialisation
-Huge movement of people to cities may cause housing/social. problems.
-Increase in imports
-Increase in multinationals which may have negative impact on the country.
-Consumers may spend extra income on services rather than goods.
-Rising imports may take the market away from domestic firms.
Deindustrialisation
The decline in the secondary sector of a country.
Consequences fo Deindustrialisation
-Loss of jobs in the secondary and primary sectors
-Movement fo people to cities
-Job opportunities in tertiary sector
-Increased training programmes to find jobs in tertiary sector.
Private sector
Businesses owned and operated by private entities
Benefits and Limitations of Private limited company
Benefits
-Limited liability
-Separate legal personality
-Company can sell shares to family, friends or employees to raise capital
-There is continuity even after the death of a shareholder
Limitations
-There legal formalities that need to be fulfilled to establish the business
-Shares cannot be sold to the general public
-Difficult for shareholders to sell shares
-There is less secrecy over financial affairs
Benefits and Limitations of Public limited company
Benefits
-Limited liability
-Separate legal identity
-There is continuity
-Easier for shareholders to buy or sell shares
Limitations
-Legal formalities need to be full filled
-There risk of takeover due to the availability of shares
-Share prices fluctuate for reasons beyond the control fo the business
-High cost for paying advice from business consultants
Public sector
Business that are accountable and owned by state or local govt.
Mixed economy
Economic resources are owned by both private and public
Free market economy
Economic resources are owned by private sector with very little state intervention
Command economy
Economic resources are owned and operated by the state govt