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Business > Types Of Business Organisations > Flashcards

Types Of Business Organisations Flashcards

1
Q

What is the private sector?

A

A business owned and run by a private individual(s)

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2
Q

What size can a private company be?

A

It ranges from a sole trader all the way to a large company owned by thousands of shareholders

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3
Q

What is the most common type of business organisation in the UK?

A

A sole trader

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4
Q

What is a sole trader?

A

A business owned and run by one person (although they might have people working for them)

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5
Q

What are advantages of being a sole trader? (6)

A
  • The owner gets all the profits
  • The owner is in full control of the business (they make all the decisions)
  • Often small businesses don’t require as much equity (investment)
  • Easy to set up (few legal requirements)
  • Business affairs can be kept private
  • A more personal service is offered to customers (a way of fighting off competition)
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6
Q

What are disadvantages of a sole trader? (5)

A
  • The owner has unlimited liability
  • Long working hour may be required to establish the business
  • Borrowing money can be difficult since the business is so small
  • It may be difficult to organise time off for holidays
  • Being a sole decision maker can be a burden
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7
Q

What is a partnership?

A

A business owned and managed by 2-20 people with eh shared goal of making a profit

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8
Q

What are advantages of a partnership? (4)

A
  • More owners than a sole trader which means more equity invested into the business
  • Decisions making and responsibility is shared
  • Jobs can be completed to a high standard is partners specialise in their area of expertise
  • The workload can be shared
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9
Q

What are disadvantages of a partnership? (4)

A
  • Partners have unlimited liability
  • Profits must be shared
  • Arguments may occur when making decisions
  • Partners may leave, upsetting the running of the business
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10
Q

What are the 2 types a of limited companies operating in the UK? (2)

A
  • Private limited company (Ltd)
  • Public limited company (plc) (not in Nat5 course)
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11
Q

What is a (Ltd)?

A

A business owned by private shareholders

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12
Q

How do you become a shareholder in an Ltd?

A

You must be invited in meaning shareholders must agree to the admission of new shareholders

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13
Q

What is a dividend?

A

The profit of a business that shareholders receive in each year

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14
Q

What are dividends dependent on? (2)

A
  • The profit made in a year
  • The future plans of the business
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15
Q

How many shareholders must a business have?

A

At lease one shareholder and one director

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16
Q

Who runs a Ltd?

A

A board of directors (which may consist of all the shareholders if the company is small)

17
Q

What are advantages of an Ltd? (3)

A
  • Ownership is not lost to outsiders
  • Ability to become lager than a partnership since there in no limited number if shareholders
  • Shareholders have limited liability
18
Q

What are disadvantages of an Ltd? (3)

A
  • There is limited ability to raise finance through a share issues
  • Financial accounts have to be public
  • It is more complicated to set up than a sole trader or partnership
19
Q

Who owns the public sector?

A

The government on behalf of taxpayers

20
Q

How are public organisations financed?

A

By taxes that individuals and businesses have to pay

21
Q

What does the central government have responsibility for?

A

The provision of essential services for the whole country

22
Q

What are examples of essential services for the whole country? (4)

A
  • The National Health Service (NHS)
  • Defence
  • Social security
  • Emergency services
23
Q

Why do local governments receive finances from national governments? (5)

A

To deliver local services such as:
- School
- Council housing
- Refuge collections
- Libraries
- Leisure centres

24
Q

What does the third sector consist of? (2)

A
  • Non-profit making organisations
  • Social enterprise
25
Q

What is a social enterprise?

A

A business that trades for a social and/pr environmental purpose

26
Q

What are examples of non-profit making organisations? (3)

A
  • Clubs/ societies
  • Charities
  • Voluntary organisations
27
Q

What are some skills and qualities of an entrepreneur? (4)

A
  • Problem solving
  • Hardworking
  • Determined
  • Invested Into the business

Business (11 decks)

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