Different Forms of Business Flashcards
(36 cards)
What are public sector organisations?
Owned by the government and run by them
What do public sector organisations aim to provide?
Services to the public than rather make a profit
What is an example of public sector organisations?
NHS
What are private sector organisations?
Owned by and run by private individuals
What is an example of a private sector organisation that aim to make a profit?
Charities
What are social enterprises?
Normal businesses with a social objective.
What are a social enterprise’s profits used to pay for?
Its social activities
What are mutual organisations?
Like building societies aim to offer the best value on products and services
What are a mutual organisation profits used to pay for?
Profits are reinvested into the business in order to reduce prices
What does unlimited liability mean?
That any business debts become the personal debts of the owner
What is an example of a business with unlimited liability?
Sole traders
Why can unlimited liability be bad?
Huge risk
What is limited liability?
That the owners aren’t personally responsible for any debts of the business
Do shareholders have limited or unlimited liabilty?
Limited liability
What are 2 examples of businesses that have limited liability?
Private and public limited companies
What is a sole trader??
An individual trading in his or her own name
What is the main feature why people become sole traders?
They have full responsibility of finances and meeting costs and requirements
What does Capital Requirement mean?
Money invested to set up a business or fund growth
What are 2 advantages of being a sole trader?
Freedom
Profit
What are 2 disadvantages of being a sole trader?
Risk
Unlimited liability
How are public sector organisations funded??
By UK tax system
What is A LTD?
Private limited company
What is a PLC?
Public limited company
What liability do PLCs and LTDs have?
Limited
