BM U3 AOS1

Unlimited liability

owner is personally responsible for business’ debts, legal obligations, and losses

Limited liability

owner and business are separate legal entities, therefore shareholders / owners not personally liable for business’ debts, etc.

Incorporation

is the process to become a registered company and a separate legal entity from the owner

Sole proprietary / Sole trader aspects

• owned and operated by 1 person

• unlimited liability

• pays tax using owner’s personal Tax file number (TFN)

Partnership

• owned by 2 - 20 people

• unlimited liability

• separate TFN from owner

Private limited company (PTY LTD)

• limited liability

• minimum of 1 - 50 share holders

• shares only offered to whom business wishes

Public listed company (LTD)

• limited liability

• minimum of 1 shareholder (no max)

• shares openly traded on Australian Securities Exchange (ASX)

Social enterprise

• business with the objective of fulfilling a social need

• charity → cooperative or privately owned

• doesnt rely on donations as main income

• benefits society !

Government business enterprise

owned by the government

Business objectives

desired outcome or specific result that a business intends to achieve

Business objectives (LIST)

1. To make a profit

2. To increase market share

3. To improve efficiency

4. To improve effectiveness

5. To fulfill a social need

6. To fulfill a market need

7. To meet shareholder expectations

Profit

what is left after expenses are deducted from revenue

Efficiency

how well a business uses it’s resources to maximise output and minimise wastage

Effectiveness

the degree at which the business has achieved its stated objectives

Business stakeholders

groups or individuals who interact with business and have a vested interest in its activities

Business stakeholders (LIST)

1. Owners

2. Managers

3. Employees

4. Suppliers

5. General community

Management styles

the behaviour and attitude of the manager when making decisions, directing and motivating staff, and implementing planes to achieve business objectives

Management styles (LIST)

1. Autocratic

2. Persuasive

3. Consultative

4. Participative

5. Laissez-faire

Management skills

abilities or competencies that managers use to help them to complete the tasks that are necessary for the achievement of business objectives

Management skills (LIST)

1. Leadership

2. Communication

3. Delegating

4. Planning

5. Decision making

6. Interpersonal skills

Corporate culture

the values, ideas, expectations and beliefs share by members of the business

OFFICIAL corporate culture

what businesses wants the shared values and beliefs of its people to be

REAL corporate culture

actual underlying values and beliefs of the people within the business

elements of corporate culture

1. values and beliefs

2. symbols

3. rights, rituals and celebrations

4. heroes