Higher Business Management: understanding business

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Unit one of the higher business management course.
Nisha Sanghera
Flashcards by Nisha Sanghera, updated more than 1 year ago
Nisha Sanghera
Created by Nisha Sanghera almost 8 years ago
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Question Answer
What are the sectors of industry? Primary, secondary, tertiary and quaternary
What businesses are involved in the primary sector? Businesses that exploit or extract natural resources
Give 2 examples of businesses in the primary sector? Farming Fishing Coal mining Forestry Oil exploration
What businesses are involved in the secondary sector? Businesses involved in manufacturing or construction
What businesses are involved in the tertiary sector? Business that provide a service rather than a physical good
What does the quaternary sector consist of? Industries that provide specific information services
Which sector of industry provides most jobs for the Scottish economy? The tertiary and quaternary sectors with employing 76% of the workforce
What are they main causes of the trend employment moving from primary and secondary sectors to the tertiary and quaternary? -Increase competition from abroad where products can be produced more cheaply -changes in consumer lifestyle people are wealthier and increase in free time so higher demand for leisure services -lack of investment in manufacturing -many primary resources have become exhausted
The capital of a Ltd is divided into what? Shares with each shareholder owning a number of these shares each
What is the minimum number of shareholders must a Ltd have? 2
Who usually manages a Ltd? A board of directors (with a minimum of one director and one company secretary)
Can a private limited company sell shares to the public on the stock market? No which makes it difficult for large amounts of finance to be raised
Give 3 examples of successful private limited company's? Innocent Ltd Arnold Clark Ltd Tunnock's Ltd Baxters Ltd
What must you do to become a private limited company? Register with the registrar of companies and sign 2 legal documents
What are the names of the legal documents you must sign to become a limited company? A memorandum of associations Articles of association
What does the 2 legal documents outline? The company's details The responsibilities of directors Shareholders rights
What are the main objectives of a private limited company? Profit maximisation Sales maximisation Increase market share Developing a good reputation
How are private limited company's financed? Applying for government grants Issuing shares Borrowing loans Using retained profits from previous years
Shareholders of Ltd have limited liability what does this mean? Shareholders do not risk personal bankruptcy if the company fails
3 advantages of operating as a Ltd? -More fiancé can be raised from shareholders -shareholders/directors bring a degree of expertise to the business -control of the company cannot be lost to outsiders
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