What is a business?

HideShow resource information
Legal Structure
The legal definition of a business e.g. corporation, partnership, sole trader.
1 of 42
Private sector organisation
Owned, financed and run by private individuals rather than the government
2 of 42
Public Sector organisation (AKA) state owned or government organisations
Owned and operated by the government whether a national, regional or local level.
3 of 42
Unincorporated business
no distinction in law between the individual owner and the business itself
4 of 42
Incorporated business
The business has a legal identity that is separate from the individual owners.
5 of 42
Unlimited liability
A situation in which the owners of a business are liable for all the debts that the business may incur. It is a characteristic of an unincorporated business
6 of 42
Limited liability
A situation where a persons financial liability is limited to a fix sum generally the amount invested into a business
7 of 42
Sole trader
A business owned by one person. They may operate on their own or may employ other peeople
8 of 42
Private limited company
A small-to-medium size business that is usually run by the family or the small group of individuals who own it. Shares are NOT sold on the stock exchange
9 of 42
Public limited company
A business with limited liability and where its shares are traded on the stock exchange.
10 of 42
Ordinary share capital
Money given to a company by shareholders in return for a share certificate that gives them part ownership of the company
11 of 42
A payment made by a company to its shareholders out of profits earned
12 of 42
Market capatilisation
The value of outstanding shares in a public limited company (current market price of an individual share x number of issued ordinary shares)
13 of 42
The owner of a limited company; any person, company or other institution that owns at least one share in a company
14 of 42
Share price
The price of a single share in a company
15 of 42
Non-profit organisation
An organisation that uses its surplus revenues to further achieve its purpose or mission,
16 of 42
An organisation's aims or long-term intentions, it's ultimate purpose. Sometimes the same as its corporate aims
17 of 42
Mission Statement
A qualitative statement of an organisation's aims that uses language to motivate employees and convince those outside the firm of its sincerity and commitment
18 of 42
Business objectives
Goals that must be achieved in order to realise the stated aims of an organisation, department or individual team. Business objectives tend to be medium or long-term. They can be corporate or functional objectives
19 of 42
Corporate objectives
Goals of the whole organisation rather than of different elements of the organisation. Set in order to co-ordinate the activities, give a sense of direction to and guide the actions of the whole organisation. Directed by the mission or corporate aims
20 of 42
Functional objectives
Goals of each of the functional areas of business(eg;marketing,finance,HR). They are there to ensure the business achieves its corporate objectives and its overall aims and objectives. Set in order for the same reason as corporate objectives
21 of 42
The medium- to long- term plans through which an organisation intends to achieve its objectives
22 of 42
The amounts of money flowing into and out of a business over a period of time
23 of 42
The amount paid by a consumer to purchase one unit of a product
24 of 42
Total Revenue, AKA; income, revenue, sales revenue, sales turnover, turnover
The income recieved from an organisation's activities. (total revenue=price per unit x quantity of units sold)
25 of 42
The difference between the income of a business and its total costs
26 of 42
Fixed costs
Costs that do not vary directly with output in the short run (e.g. rent.)
27 of 42
Variable costs
Costs that vary directly with output in the short run (e.g. raw materials)
28 of 42
Total costs
The sum of fixed costs and variable costs
29 of 42
Political, Economic, Social, Technological, Legal, Environmental
30 of 42
The amount of a product (i.e. a good or a service) that consumers are willing and able to buy at any given price over a period of time
31 of 42
Consumer goods
Goods purchased in order to satisfy the needs and wants of consumers, can be classified into consumer durables and non-durable consumer goods.
32 of 42
Consumer durables
goods that are not instantly consumed but but are used over a period of time e.g. cars, television, computers, refrigerators, washing machines etc.
33 of 42
Non-durable consumer goods
Goods that are consumed in the point of use, e.g. food products, washing up liquids, etc.
34 of 42
Capital goods AKA investment goods
Items that are purchased by firms because they are used in the productions because they are used in the productions of other goods, e.g. tools and equipment,plant and machinery and buildings.
35 of 42
Interest rates
The cost of borrowing money and the return for lending money
36 of 42
the rate at which the general level of prices for goods and services is rising and with a possible consequence, the purchasing power of currency is falling
37 of 42
Disposable income
Income left for spending after taxes have been deducted from gross income
38 of 42
Discretionary income
Disposable income less all the regular bills that must be paid, including rent, mortgage, bank loans, credit card payments, utilities, transport and food. It is therefore income available to spend on luxury or non-essential goods and services.
39 of 42
The characteristics of human populations and population groups; it includes analyses of a range of elements including migration trends , birth and death rates, trends in age, ethnicity and gender, level of education, marital status and size of family
40 of 42
A measure of the extent to which a person or organization has cash to meet immediate and short-term obligations, or assets that can be quickly converted to do this.
41 of 42
A rescue mechanism for businesses that become insolvent. This means they are able to continue trading, e.g. selling the business to new owners or separating the business into different elements that can be sold and closing those that cannot.
42 of 42

Other cards in this set

Card 2


Owned, financed and run by private individuals rather than the government


Private sector organisation

Card 3


Owned and operated by the government whether a national, regional or local level.


Preview of the back of card 3

Card 4


no distinction in law between the individual owner and the business itself


Preview of the back of card 4

Card 5


The business has a legal identity that is separate from the individual owners.


Preview of the back of card 5
View more cards


No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all Understanding different business forms resources »