Business Exam Revision

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Risk
50% chance of failure.
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Reward
Something of value given in return for a risk.
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Business activity
This includes any activity engaged in the primary purpose of making a profit.
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Private limited company (LTD)
A private limited company (ltd) is often a small business such as an independent retailer in a market town. Shares do not trade on the stock exchange.
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Primary Sector
Businesses that fall into this sector are involved in the extraction of raw materials.
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Stakeholders
a person with an interest or concern in a business.
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Secondary Sector
Companies that operate in this sector are involved in the manufacturing of the extracted raw materials.
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Chain of Production
Goods move through a “chain of production”. The chain of production follows the construction of a good from its extraction as a raw material through to its final sale to the consumer.
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Tertiary Sector
Businesses in this sector are defined as providing a service. It includes all retailers, utility providers and leisure services.
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Functional area
Grouping of individuals in the organisation, on the basis of the business work each performs.
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Public limited company (PLC)
A public limited company (PLC) is the legal designation of a limited liability company which has offered shares to the general public and has limited liability. A PLC's stock is offered to the general public and can be acquired by anyone.
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Franchise
A franchise is a business system in which private entrepreneurs purchase the rights to open and run a location of a larger company. The franchising company, or franchisor, signs a contractual agreement with the franchisee.
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Not-for-profit/Charity
An organization that uses its surplus revenues to further achieve its purpose or mission, rather than distributing its surplus income to the organization's directors as profit or dividends.
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Finance
The management of large amounts of money, especially by governments or large companies.
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Human Resources
The department of a business or organization that deals with the hiring, administration, and training of staff.
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Marketing
The action or business of promoting and selling products or services, including market research and advertising.
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Operations
The action of functioning or the fact of being active or in effect.
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Objectives
A detailed picture of a step you plan to take in order to achieve a stated aim.
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Mission Statement
a formal summary of the aims and values of a company, organization, or individual.
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Administration/ ICT
System administration, network management, analytical skills, critical thinking. ... A system administrator, or sysadmin, is a person who is responsible for the upkeep, configuration, and reliable operation of computer systems.
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Aims
The goal a business wants to achieve.
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Advantages of a sole trader
•you're the boss •you keep all the profits •start-up costs are low •you have maximum privacy •it's easy to change your legal structure later if circumstances change •establishing and operating your business is simple
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Disadvantages of a sole trader
•your capacity to raise capital is limited •you have unlimited liability for debts •You make all business decisions •you’re taxed as a single person •the life of the business is limited
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Advantages of a partnership
•two heads (or more) are better than one •your business is easy to establish and start-up costs are low •more capital is available for the business •there is limited external regulation •Income splitting is resultant in tax savings
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Disadvantages of a partnership
•Liability of the partners for the business debts is unlimited •A risk of disagreements •each partner is liable for the actions of other partners
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Sole trader
A person who is the exclusive owner of a business, entitled to keep all profits after tax has been paid but liable for all losses
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Partnership
A business run by 2-20 people
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Advantages of a Public limited company (PLC)
•Limited Liability for shareholders •The business is viewed as a separate legal entity •Ability to raise large amount of capital •no limit to the number of shareholders
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Disadvantages to a Public Limited Company (PLC)
•There must be at least 2 directors • Accounts for PLCs must be filed within 6 months of the year’s end •The company’s secretary must be certified
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Advantages Private limited company (LTD)
•The owner's liability is limited to their shares •Limited to having 50 or less shareholders
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Being made redundant
when you are dropped from the job for example they cannot be payed.
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Other cards in this set

Card 2

Front

Something of value given in return for a risk.

Back

Reward

Card 3

Front

This includes any activity engaged in the primary purpose of making a profit.

Back

Preview of the back of card 3

Card 4

Front

A private limited company (ltd) is often a small business such as an independent retailer in a market town. Shares do not trade on the stock exchange.

Back

Preview of the back of card 4

Card 5

Front

Businesses that fall into this sector are involved in the extraction of raw materials.

Back

Preview of the back of card 5
View more cards

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