Types of Business

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What is a sole trader?
Someone who runs the business alone, and are legally inseperable from the business
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advantages of a sole trader?
sole trader can keep all profit (after tax), can make all business decisions
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disadvantage of a sole trader?
The sole trader is fully responsible for the businesses debt, They can easily be overworked
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What is a partnership?
2 or more people running a business, the partners are legally attached to the business
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advantages of a partnership?
easy to establish, losses are shared
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disadvantage of a partnership?
One partner debts are equally liable by all other partners, possible conflict in decision making,
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what is a limited liability partnership?
A partnership in which the members are not equally responsible.
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Advantages of a limited liability partnership?
Members arent equally liable for the businesses debts
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disadvantage of a limited liability partnership?
Their accounts are available to the public (competitors)
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What is the difference between a private company and Public Company
A Public company can sell on the stock market whereas a Private company cannot, A public company can involuntarily be bought out if a shareholder buys 51%, A public company must have a minimum share capital of £50,000, a private has no minimum
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advantages of a company?
A company is limited liability, A company can gain capital through issuing shares
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Disadvantages of a company?
Company accounts are not private, More people mean harder to manage, can be subject to hostile takeover
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what is limited liability?
Shareholders responsibility for business debts are based on how many shares owned
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What is unlimited liability?
All general partners and sole proprietors are personally responsible for paying off all of the company debts
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Factors affecting choice of businesses legal structure
cost of business to set-up, level of control wanted over business, future goal of business
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explain the factors affecting choice of businesses legal structure
Companies can raise share capital to pay for the business, A sole trader will have complete control, sole traders pay tax on income not profits whereas a Limited liability company does
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What is marketings function within a business?
Research consumer interests in order to attract the most customers
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What is productions function within a business?
The process of the turning the input of resources into a product to output
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What is operations management function within a business?
The design and control of the production process to maximise efficiency
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What is accounting and finances function within a business?
Monitor an control the businesses financial resources
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what is customer services function within a business?
The service provided by the employees to customers in order to assist with sales
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What is sales and support services function within a business?
Variety of functions to help your sales representatives sell and close deals.
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What is HR function within a business?
Responsible for the employees wellbeing, recruitment and training
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How is a businesses size measured?
The number of employees in relation to other businesses in the market
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What is a small enterprise
less than 50 employees
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What is a medium enterprise
50 to 250 employees
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What is a large enterprise?
Over 250 employees
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What factors affect a businesses size?
market size, If product requires a large team, if entrepreneur wants to expand, availability of funds to expand
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Affect of large business on employees
advantages - greater job security, HR department. Disadvantages - disconnected from decision makers, in-effective communication
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Affect of large business on suppliers
advantages - job security, large orders. Disadvantages - larger business has more power, may become reliant on large business for orders
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Affect of large business on local community
advantages - creates jobs, boost economy. disadvantage - damage small businesses, ethical issues
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Affect of large business on shareholders
advantages - higher market power from larger businesses. disadvantages - large businesses are less flexible to making needed change, share prices fluctuate more
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Affect of large business on customers
advantages - better customer service to maintain image, cheaper production costs so cheaper price. Disadvantages - business may become disengaged from target audience, higher prices for profit margin
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Other cards in this set

Card 2

Front

advantages of a sole trader?

Back

sole trader can keep all profit (after tax), can make all business decisions

Card 3

Front

disadvantage of a sole trader?

Back

Preview of the front of card 3

Card 4

Front

What is a partnership?

Back

Preview of the front of card 4

Card 5

Front

advantages of a partnership?

Back

Preview of the front of card 5
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