Topic 1 Classifying bussiness

Question 1

ways of classifying bussiness(4)

Answer 1

size
location
industry
legal structure

Question 2

definition of legal structure

Answer 2

how the business is legally registered

Question 3

name 4 types of legal structure(4)

Answer 3

sole trader
partnership
private
public

Question 4

what is a sole trader

Answer 4

one person as the owner

Question 5

what is a partnership

Answer 5

have multiple owners,usually between 2-20

Question 6

what is a private bussiness

Answer 6

(Pty Ltd) Propriety Limited. Incorporation. Shares cant be bought by public.

Question 7

what is a public bussines

Answer 7

(LTD) Limited. Incorporation. shares are traded on ASX

Question 8

advantages of being a sole trader(3)

Answer 8

all profits
freedom of decisions
cheap to set up

Question 9

disadvantages of being a sole trader(4)

Answer 9

unlimited liability
a lot stress & hard work
long hours
income tax

Question 10

Advantage of being a partnership(1)

Answer 10

shared work load between partnerships

Question 11

disadvantages of being a partnership(4)

Answer 11

both partners must agree on decisions =disputes?
profits are shared
income tax
unlimited liability

Question 12

advantages of being a private company(2)

Answer 12

limited liability

corporate tax

Question 13

disadvantages of being a private company(1)

Answer 13

time and cost to establish

Question 14

advantages of being a public company(3)

Answer 14

limited liability
raise money through selling shares
listed on ASX
corporate tax

Question 15

disadvantages of being a public company(1)

Answer 15

Prospectus+ Reporting

Question 16

what is a partnership agreement

Answer 16

documents outlining how a partnership business is run (amount of shares each, how profit is split, how disputes are solved)

Question 17

what is unlimited liability

Answer 17

it is when the owner and the business are seen as one entity, which means the owner is responsible for any business dealings

Question 18

what is an incorporation

Answer 18

this means that companies have limited liability.

Question 19

what is limited liability

Answer 19

it is when a business is seen separate from the owner

Question 20

what is a prospectus

Answer 20

a detailed description shared out to the public to show the company is doing to advertise to potential or existing shareholders

Question 21

ways to classify business industry(5)

Answer 21

primary industry
secondary industry
tertiary sector
Quaternary sector
Quinary sector

Question 22

what is the primary industry responsible for

Answer 22

the collection and acquisition of natural resources

Question 23

what is the secondary industry responsible for

Answer 23

manufacturing (raw materials + capital labour= product)

Question 24

what is the tertiary sector responsible for

Answer 24

providing a service sub groups quaternary and quinary

Question 25

what is the quaternary sector responsible for

Answer 25

IT, finance and information

Question 26

what is the quinary sector responsible for

Answer 26

service traditionally performed in the home(cleaning, cooking,babysitting)

Question 27

what are some Geographical location business classifications(4)

Answer 27

local business national business global business transnational business

Question 28

what is a local bussiness

Answer 28

a business that works in one area

Question 29

what is a national business

Answer 29

an organisation that operates in one country

Question 30

what is a global bussiness

Answer 30

an organisation that operates in many countries

Question 31

what is a transnational corporation

Answer 31

a company that is registered and operates in more than one country at once

Question 32

what does SME stand for

Answer 32

small medium enterprise