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Business A Level > 3.1.2 Different business forms > Flashcards

3.1.2 Different business forms Flashcards

1
Q

5 what is an unincorporated business

A

there is no distinction in law between the individual owner and the business itself
There identity of the business and owner is the same

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2
Q

5 what is an incorporated business

A

the business has a legal identity that is separate from the individuals owners
organisations can own assets, owe money and enter into contracts in their own right

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3
Q

5 what is limited liability

A

a situation in which the liability of the owners of a business is limited to the fully paid up value of the share capital

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4
Q

5 what is unlimited liability

A

a situation in which the owners of a business are liable for all debts that the business may incur

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5
Q

5 what is business ownership

A

owned by private individuals
individuals risk their own money
owners reward is the profit made

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6
Q

5 what is a privatised business

A

sold to private individuals

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7
Q

5 what is a nationalised business

A

brought under national government

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7
Q

5 what are the private sectors for for-profit businesses

A

private sector = incorporated & unincorporated
incorporated = private limited & public limited
unincorporated=sole trader & partnership

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8
Q

5 what is a franchise

A

small business trading with agreement of a large firm

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9
Q

5 what are cooperatives

A

collectively owned by workers/customers
company pays cooperation tax
operates until formally wound up or liquidation

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10
Q

5 what are annual general meetings AGMs

A

a legal requirement for plcs to hold a yearly meeting when company directors invite all of shareholders to come quiz the board and vote on new resolutions

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11
Q

5 what is a sole trader

A

1 owner

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12
Q

5 benefits of a sole trader

A

easy to set up
owner is independent
minimum paperwork
respond quickly to changes
know customers
more privacy

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13
Q

5 drawbacks of a sole trader

A

unlimited liability
long hours with no cover
capital is savings
limited collateral
ends on death
limited skills

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14
Q

5 what is a partnership

A

2 people or more entering into a business agreement

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15
Q

5 advantages of a partnership

A

easier to raise capital
problems can be discussed
greater range of skills
cover for holiday or sickness

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16
Q

5 disadvantages of partnerships

A

unlimited liability
profits shared
disagreements
decisions are legally binding on all
death means their share to be repaid

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17
Q

5 what is an LTD

A

private limited company
small to medium, family run
limited liability

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18
Q

5 advantages of LTD

A

limited liability
1 director, 1 shareholder
easy to set up, raise capital
share transfers need all agreed
more privacy
death of shareholder has no effect

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19
Q

5 disadvantages of LTD

A

shares are less attractive as not sold on stock market
less flexible if expansion needed
more regulations to comply with
accounting procedures may be costly

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20
Q

5 what is a plc

A

public limited companies
limited liability
large organisations, shares sold on stock market

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21
Q

5 advantages of plc

A

limited liability
easier to raise finance from public
2 directors, 2 shareholders, different people
share value increase if success
economies of scale
positive publicity because of stock market
suppliers more willing to offer credit

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22
Q

5 disadvantages of plc

A

lots of regulations
accounts are public accessible
shareholders can sell shares
OG owner can lose control if 51% shares bought
stock exchange allows pressure from investors

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23
Q

5 what is a not-for-profit organisation

A

run according to business principles, but don’t aim to make a profit
public sector, cooperatives, pressure groups, social enterprises

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24
5 what is the public sector
part of the economy owned and controlled by the government
25
5 what is a public sector organisation
provide goods and services to the public nationally and locally owner and controlled by the government
26
5 why do NFPs exists
essential services not fully provided by private sector prevent exploitation of customers protect jobs and maintain key industries
27
5 what is privatisation
sales of public sector orgs to private individuals some state run business are inefficient, with no incentive to cut cost or provide high quality financial burden on government selling them off raises money for government
28
5 what are the disadvantages of privatisation
may increase prices cut jobs and reduce services
29
5 what are co-operatives
any organisation jointly run and owned by members who have equal voting rights voluntary membership democratic educational facilities
30
5 what are pressure groups
people that attempt to influence decisions makers in politics business and society
31
5 what are social enterprises
a business with primarily social objectives profits re-invested in the business or community not driven by need to maximise profits can be public or private
32
6 what is a stakeholder
groups or individuals that have an interest in a business may be affected by or affect the business decisions or organisations
33
6 what are some internal stakeholders
shareholders managers employees
34
6 what are some external stakeholders
suppliers government pressure groups pressure groups local community competitors customers financiers
35
6 what is a pro-cyclical system
continues the trend when market is up and down you buy when stocks are high sell when stocks are low
36
6 what is a counter-cyclical system
cycling against the market buy when stocks are low sell when stocks are high
37
6 what are shareholders
own part of a business dont get involved with day-to-day running right to vote of the companies AGM receive a share of profit, called a dividend
38
6 what are shareholders interests
customers want lower prices, good value for money, regular food source shareholders want to make profit, good reputation, earnings per share, assets, dividends yield, more efficiency
39
6 what are shareholders main rewards
annual dividends of payments rise in share value
40
6 what is shareholder concept
shareholders are most important employee, managers to run orgs on their behalf
41
6 what is corporate social responsibility
all responsibilities of an organisations to stakeholders in eluding the communities and society at large considers financial and non-financial performance of orgs
42
7 what is share price
the price of a single share of a company usually determined by a supply and demand for shares
43
7 what is market capitalisation
value placed on the business by the stock market calculated as 'share price x number shares issues'.
44
7 what is the significance of share prices
changes in share prices can have significant effects on a business over a long timescale rising share prices falling share prices
45
7 influences on share prices
state of the economy company performance competition in market proposed take overs investor expectation/rumour response
46
7 influences on share prices; state of the economy
if the economic conditions are good and expected to continue, investors feel confident, demand rise so price increase. opposite is true
47
7 influences on share prices; company performance
if a company performs well and is expected to continue if share price will rise
48
7 influences on share prices; competition in market
how well the company responds to the threat of competition in it's market will influence how it performs overall
49
7 influences on share prices; proposed take overs
influence other prices of shares and will reflect whether investors think the takeover will succeed
50
7 influences on share prices; investor expectation/rumour response
when people see others selling shares they follow & sell causes an increase in supply of shares with litre demand so prices of share fall
51
7 what is a takeover
a company offers to take control of another company by buying enough shares to ensure it has the power to influence policy, make decisions and elect directors
52
7 if share prices fall...
consumers don't think about it investors may sell business will buy a load of share to do in a hostile takeover and buy them out
53
7 general changes in share prices
difficulties consumers and orgs as may cut spending reduces sales made by a wide range of business provoke an economic recession OPPOSITE IS TRUE
54
8 what is a sole trader
someone who holds ownership unlimited liability
55
8 what is the stock market
where shares can be sold, bought and traded only from PLC
56
8 what is a partnership
when two or more people can enter into a business agreement unlimited liability
57
8 what are taxes
percentage profit paid to government based on income to provide public seniors
58
8 what is capital
money into the business to start with
59
8 what is a franchisor
a business that buys one business sells the franchise to the franchisee costa = franchisor holt = franchise
60
8 what are dividends
paid to shareholders in quarterly instalments profit
61
8 what is LTD
private limited company limited liability friends or family invite to make a deal
62
8 what is the public sector
business paid and owned by the government
63
8 what is unlimited liability
if a business goes into debt the owner is liable to pay all of what owed
64
8 what are common objectives
maximise profit cashflow diversity increase market share growth social and ethical
65
8 what are social goals
long term improvement for people and the environment in the supply chain H&M
66
8 what determines objectives
corporate outline size and legal form of the business age of the business
67
8 why do objectives change
achieve original objectives business has grown competitive environment changes market changes technology changes
68
8 purpose of aims and objectives
provide direction for the orgs forms a basis for allocating resources motivational monitor performance measure success
69
8 what are some conflicting objectives
profit and growth, expansion can increase costs providing a service and growth, smaller firms know customers better business must decide who is its priority stakeholder
70
8 stakeholder; shareholders objective influence
maximise profit to get high dividends low influence unless high shares
71
8 stakeholder; managers objective influence
promotions good high salaries middle influence
72
8 stakeholder; customers objective influence
good quality low price, value money can vary in influence
73
8 stakeholder; employees objective influence
better pay, stay employed good work low influence
74
8 stakeholder; government objective influence
high tax revenue job creation can be high influence
75
8 stakeholder; creditors objective influence
healthy cashflow, increased sales varies in influence
76
8 stakeholder; suppliers objective influence
regular orders, increased sales vary due to market in influence
77
8 stakeholder; pressure groups objective influence
business meets their demands low influence
78
8 why do the objectives of shareholders conflict
shareholders want high dividends = high profit works want high wages = low profit
79
8 why can business objectives conflict
short term will conflict with long term short term is survival, risk it maybe avoided long term is growth, risk shouldn't be taken
80
8 how can business avoid conflict
if business is adaptable it will overcome conflict objectives may change if circumstances change

Business A Level (23 decks)

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