Flashcards
Types of Business
Cards in this deck (11)
- 1Classification of Business: Size- Micro: 5 or fewer employees
- Small: fewer than 20 employees
- Medium: 20 - 199 employees
- Large: 200 or more employees - 2Classification of Business: Local, National, Global- Local: serves the surrounding areas. Small-medium e.g. hairdresser.
- National: Operating in one country e.g. Sportsgirl.
- Global: Based in one country and their goods and services are produced and sold in a number of countries e.g. Coca-Cola - 3IndustryPrimary: Production is associated with natural resources e.g. farming
Secondary: The raw materials and the process to finish it e.g. car manufacturing.
Tertiary: provides a service e.g. teacher.
Quaternary: Transfer & process of information e.g. finance.
Quinary: services performed in the home e.g. child care - 4Classification of Business: Legal Structure- Sole Trader: unincorporated,one owner. Responsible for all decisions.
- Partnership: 2-20 owners. Unincorporated and Unlimited Liability
- Private: 1-50. Owners are called shareholders. Incorporated and limited liability, has Pty Ltd after their name.
- Public: listed under Australian Stock Exchange ownership open to public.
Government Enterprises: Owned by Australian Public e.g Australia post - 5Proprietary Limited (Pty Ltd)A private company has (Pty Ltd) after its name. Pty means the company is private. Ltd means the company has limited Liability.
- 6Factors influencing choice of legal structure - Size:The business may start as a sole trader. As the business enters the growth phase, investors may be bought into the company. Private company structure - protects investors through limited liability.
Public company structure - allows easier access to funds. - 7Factors influencing choice of legal structure - Ownership:Associated with control. Individuals who want to be own boss - sole trader structure. Individuals who work well with others - partnerships or private companies.
- 8Factors influencing choice of legal structure - FinanceMost businesses are established with a limited amount of capital. Growth may be achieved by offering a partnership or to a private company to provide increased protection (limited liability)
- 9Geographical spreadIs the presence of a business and the range to its products across a suburb, city, state or country or the globe. Eg. Local businesses.
- 10IncorporatedIs the process companies go through to become a separate legal entity from the owner/s.
- 11Unincorporatedbusiness is a sole trader (1) or partnership (2). - most common as it is easiest and cheapest.