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Unit 6 > chapter 20 Business Organisations > Flashcards

chapter 20 Business Organisations Flashcards

(79 cards)

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1
Q

4 headings

A

formation
liability
finance
control

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2
Q

sole trader formation

A

start straight away in own name or register with CRO

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3
Q

CRO

A

Companies Registration Office

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4
Q

sole trader liability

A

unlimited

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5
Q

sole trader finance

A

limited to their savings or ability to access loans (can be difficult if theyre a new business with no history)

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6
Q

sole trader control

A

owner maintains total control and makes all decision

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7
Q

sole trader advs

A

easy/quick to set up
total decision making
keeps all profits
maintains privacy on accounts

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8
Q

sole trader dis

A

takes on all risks (personal and financial)
unlimited liability
may lack adequate capital
high work load (sole decision maker)

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9
Q

partnership formation

A

form LP1 must be completed for CRO

deed of partnership(contract) is signed

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10
Q

partnership liability

A

unlimited

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11
Q

partnership finance

A

2-20 partners can invest their savings plus loans

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12
Q

partnership control

A

decisions are shared by partners

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13
Q

partnership advs

A

risk and decisions shared

benefits from a range of experience/skills

access to more capital than sole trader

maintains privacy on accounts

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14
Q

partnership dis

A

unlimited liability

slower decision making (conflict)

partnership dissolved on death of partner

profits shared between partners

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15
Q

private limited company formation

A

must create a constitution
need to fill out form A1
CRO issues a cert of incorporation

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16
Q

private limited company liability

A

limited liability

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17
Q

private limited company finance

A

they can have up to 149 shareholders

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18
Q

private limited company control

A

1 share, 1 vote
shareholders can elect a board of directors,
bod appoints CEO who answers to the board

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19
Q

private limited company abbreviations

A

Ltd/CLS or DAC

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20
Q

private limited company advs

A

access to capital
limited liability
1 share, 1 vote
establishes a separate legal entity -bus not owners sued
continues existence upon death of a shareholder

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21
Q

constitution

A

name of company
statement stating company limited by shares
liability of shareholders are limited
rules and regulations for running the company
info available for public inspection

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22
Q

statutory meeting

A

1st meeting
constitution explained
share certs given to shareholders
vote on 1st BOD

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23
Q

companies act 2014

A

rules that companies must obey

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24
Q

CLS

A

Company Limited by Shares

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25
DAC
Designayed Activity Company
26
memorandum of association
document completed setting out the relationship between the company and the general public. It includes the name of the company with Ltd after it
27
articles of association
document completed setting out the internal rules and regulations of the company. It describes the voting procedures for meetings
28
co-operative definition
members own the co-operative common bond business for their mutual benefit worker/consumer/financial
29
co-operative formation
7+ members apply to the Registrar of Friendly Societies
30
co-operative liability
limited
31
co-operative finance
members receive a share of the profits in proportion to turnover
32
co-operative control
democratic structure | 1 member 1 vote
33
co-operative adv
limited liability members have a say in the running of the business common bond may not be profit-driven so good deals on loans
34
co-operative dis
``` profits shared difficult to raise capital everyone has a say regardless of capital invested finances must be disclosed complicated to set up ```
35
PLC
public limited company
36
plc formation
7+ shareholders | sell shares to the public
37
plc liability
limited
38
plc finance
can raise capital bu selling shares to public on tock exchange
39
plc control
loss of control for original owners
40
plc
stock exchange listing can boost exposure for the brand and can help attract top staff easier targets for takeover bids because share price impacts the value of the company and that’s out of control for owners
41
plc adv
limited liability easier to raise capital pay less tax on their profits than sole traders attract a lot of media interest through newspapers and on TV which helps attract top employees
42
plc dis
complicated to form loss of control for original owners open to hostile takeover as shares are public expensive to sell shares
43
semi-state bodies
state-owned enterprises that are technically commercially run, which benefits the Irish gvt (eg Dublin Bus, An Post, RTE, Bord Gais)
44
semi-state bodies adv
employment better standard of living develop Irish economy- IDAs and foreign investment eg Dell and Intel, employment, pay taxes profit, gvt receives money, ESB is successful
45
semi-state bodies dis
might make a loss not judged by profit- no incentive to reduce costs, tax payers money wasted appointees are made by gvt, political reasons rather than expertise large loans- gct cant give them money- EU comp policy
46
Privatisation
sale of state-owned enterprises to the private sector the sale raises money for the gvt but they then lose control over the service eg Aer Lingus
47
arguments for privatisation summarised
* gvt revenue * reduced expenditure * efficiency * access to finance * industrial relations * competition
48
arguments for privatisation | gvt revenue
large sum of money | 335m for Aer Lingus
49
arguments for privatisation | reduced expenditure
gvt won’t need to subsidise business
50
arguments for privatisation | efficiency
state owned are perceived as inefficient as they rely on gvt funding
51
arguments for privatisation | access to finance
take out loans | sell shares
52
arguments for privatisation | industrial relations
job security | more likely to fo on strike when in the public sector
53
arguments for privatisation | competition
reduce state monopoly more competition lower prices for consumers
54
arguments against privatisation summarised
* loss of state assets * increased unemployment * loss of control * profit motive/increased prices
55
arguments against privatisation | loss of state assets
protect certain industries eg transport and water supply
56
arguments against privatisation increased unemployment
loss of jobs due to rationalising
57
arguments against privatisation | loss of control
end up with foreign investors
58
arguments against privatisation | profit motive/increased prices
maximise profits | increase prices for consumers
59
nationalisation
• when a privately rum business is taken over and run bu the state • this happens when a business/industry cannot support itself • the gvt deems it an essential service for citizens • the gvt buys to save the business so that the services can be maintained eg Angle Irish Bank in 2009
60
franchising
involves the granting of a license by a franchiser to a franchisee entitling the franchisee to sell the product/service the franchiser usually has a well establishes large and successful business with a good reputation and well-established name in the market
61
franchise adv
• use a proven/successful business idea • existing customer base, loyalty, data on market • benefit from economies of scale (advertising, raw materials) • support/training/mentoring offered by franchisor
62
franchise dis
* more expensive: one-off payment of fee, the percentage of sales/profits * restricted innovation, limited range of offerings * restricted sales territories * risk of damage to brand’s reputation by other franchises
63
evaluation of a franchisee
limitation on ability to make decisions entrepreneurs are creative and adaptable they get frustrated by no changes eg can’t change the menu
64
indigenous business
set up and owned by irish people main place of business is Ireland make products in Ireland eg Staffords
65
importance of indigenous Firms in Ireland
1 firms have a high loyalty to Ireland 2 provide local benefits (eg purchase raw materials locally) 3 create entrepreneurial role models for young Irish residents 4 reduce our reliance on FDI (foreign direct investment) 5 increase Ireland’s export levels, if the companies sell abroad (improve balance of payments)
66
Indigenous firms dis
1 sell at a higher price 2 Irish marketplace is limited in size 3 if Ireland gets a rep for supporting indigenous firms it may be a disincentive for foreign investment
67
reasons to change organisation structure over time summarised
``` liability continuity expansion tax benefits expertise ```
68
reasons to change organisation structure over time | liability
move from unlimited to limited (eg sole trader to CLS)
69
reasons to change organisation structure over time | continuity
company ceases to exist on death of owner in sole or partnership but not in Ltd/CLS
70
reasons to change organisation structure over time | expansion
access to capital/ eg partnership can 2-20 investors, but Ltd/CLS can have up to 149 investors
71
reasons to change organisation structure over time | tax benefits
Ltd/CLS pays 12.5% tax on profits, sole traders pay the same rates as PAYE employee (20-40%)
72
reasons to change organisation structure over time | expertise
more owners bring more skills/ experience/ expertise, changing the structure allows this
73
changing trends in ownership
• privatisation of state-owned businesses raise cash for country to pay debts 10% of Dublin Bus Routes sold to Go Ahead in 2018 • Irish businesses are MNCs small market,member of EU, freer world trade eg primark or kerry group • franchises are popular lower risk eg starbucks • popularity in alliances share costs, resources, ideas, and customers
74
Alliance
an agreement between 2+ businesses to pool resources or expertise to work together over a specified period of time or to complete a specified project, while all parties maintain their separate eg Volkswagen and Microsoft
75
Alliances adv
* cost effective method * reduces risks * resources/expertise can be recruited * provides access to an extended business network and market
76
alliances dis
* disagreement * possible takeover * disclosure of knowledge * fewer alliance opportunities
77
transnationals
mncs •headquarters in 1 country and branches in many others •produces goods in more than 1 country operates on a worldwide scale •treats the world as a single marketplace can move operations from country to country in response to changing market conditions eg Coca Cola or Microsoft
78
transnationals adv
* tax revenue for gvt * positive spin off effects * direct employment * positive impact on the BOT
79
transnationals
* footloose * repatriation of profits * pressure on gvt * fewer alliance opportunities

Unit 6 (5 decks)

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