VCE Buieness Management Revision Overall Flashcards
(9 cards)
Outline one similarity between a sole trader and a partnership
A similarity between a sole trader and a partnership is that both businesses have unlimited liability for business debts — this means that under both types of legal business structures, the owner or owners are personally responsible for all the debts of the business. Both sole traders and partnerships are unincorporated business entities. An unincorporated business has no separate legal existence from its owner(s). A sole trader business has one person who owns and runs the business, whereas a partnership is a business owned by two or more people. The sole trader provides all the finance for his or her business, makes all the decisions and takes all the responsibility for the operation of the business. On the other hand, in a partnership, finance, decision-making and responsibility for the operation of the business are shared among the partners.
distinguish between unincorporated and incorporated business entities
incorporated business entities, such as companies, are separate legal entities to that of their owners. This provides the owners with a limited liability whereby the owner cannot be forced to cover the losses of the business with their own personal finances. Unincorporated businesses, such as sole traders and partnerships, are not separate to their owners. This means that the owners are liable for any losses incurred by the business.
explain the importance of buieness support services
Business support services exist to provide assistance to a business owner with their business planning. For example, legal support services, such as solicitors, provide information concerning business formation and structures, registration, contracts, leases, partnership agreements, patents and legislation. Community-based services, such as business enterprise centres, provide support, information, mentoring, training programs, workshops and seminars to new businesses. Without business support services, a prospective business owner would have no person or organisation to turn to for legal or financial assistance, advice, information, mentoring, support or training.
