Business Studies

The chain of production consists of three main stages:

Primary-

Collecting the raw materials for the products to be made, e.g. oil drilling, fishing, chopping down trees.

Secondary-

Assembling products from the raw materials, factories that make cars etc.

Tertiary-

Services provided by people, teaching, taxi drivers, doctors.

A limited company is a company that has limited liability (Owners are not personally liable for businesses debts).

There are two types of limited companies,

Public limited company (PLC)-

A company that can sell their shares freely on the stock exchange.

Private Limited Company (LTD)-

A company that cannot sell their shares freely on the stock exchange, instead they can only sell to friends and family.

What?

A business with one owner is called a sole trader.

Advantages-

• Be your own boss.
• Usually easy to set up due to its smallness.
• Control will be easy as the owner has a hands-own approach to the business.

Disadvantages-

• No one to share the responsibility with.
• All liabilities fall on the owner.

What?

A business that has two or more owners such as a Law firm or dental practice.

Advantages-

• Each partner can specialise in a certain field that allows the business to run smoothly.
• The workload will not be as intense due to work being shared among partners.
• More capital investment.

Disadvantages-

• Disagreements can arise.
• Unlimited liability.
• Distribution of profits may feel unfair to some who work harder and earn the same as others who work less. (Leads to de-motivation).