1.1 Types of businesses

sole trader

a business that is ==owned== and ==operated== by one person often with the primary objective of making a profit.

partnership

a type of business that is owned by between two and 20 ==partners==.

Political interference

________ can cause inefficiencies in the way GBEs are run.

Limited liability, meaning the owners of the business are treated as a separate legal entity

important if the business becomes insolvent or declares bankruptcy

social enterprise

A(n) ________ is a business that produces goods or services to sell to consumers, but exists to benefit society rather than the owners.

Provides healthy competition to businesses operating in the private sector

potentially leading to lower prices for consumers

Pty Ltd

A private company is identified by the letters ‘ ________ after their trading name.

Run just like a normal business, however operates with the primary objective to fulfil a social need such as

Providing employment opportunities for the disadvantaged Contributing to other causes such as addressing societal issues e.g

private limited company

an ==incorporated== business that is owned by between 1 and a maximum of 50 ==shareholders==.

social enterprise

a business that produces goods or services to sell to consumers, but exists to ==benefit society== rather than the owners.

Directors owners

________ can still be held personally liable if found to have behaved in a fraudulent manner.

separate legal entity

Limited liability, meaning the owners of the business are treated as a(n) ________- important if the business becomes insolvent or declares bankruptcy.

Government Business Enterprise

a commercial entity that is owned and operated by the government.

public company

A(n) ________ has its shares freely traded on the Australian Securities Exchange (ASX)

More costly to establish when compared to a sole trader or partnership

accountancy and legal fees etc

key characteristics of a government business enterprise

* the main purpose of a GBE is to carry out the policy of the government through the delivery of paid for services to the communtiy

public listed company

an ==incorporated== business that will have a minimum of 1 and ==no maximum== amount of shareholders, with shares being available for purchase by the ==public==

key characteristics of a sole trader

* relies on skills, talents and experience of the owner to be successful


* owned by one person
* profits all go to the owner

advantages of being a sole trader

* owner has complete control over the running of the business
* can make decisions based on their best interests

disadvantages of a sole trader

* subject to unlimited liability
* owner is personally responsible for all business debts
* owner can be sued for business issues

key characteristics of a partnership

* all partners share in risks and rewards of operating the business
* multiple owners

advantages of a partnership

* greater pool of knowledge, experience and talent available to run the business

disadvantages of a partnership

* can be hard gaining total agreement from all partners when trying to implement change or make decisions in the business

key characteristics of a private limited company

* shares in a private company are only offered to those people the business wishes to have as part owners, and are not traded on securities exchange
* a private company is identified by the letters ‘Pty Ltd’ after their trading name

advantages of a private limited company

* limited liability - meaning the owners of the business are treated as a separate legal entity - important if the business becomes insolvent or declares bankruptcy

disadvantages of a private limited company

* more costly to establish when compared a to a sole trader or partnership - accountancy and legal fees etc
* directors/owners can still be held personally liable if found to have behaved in a fraudulent manner

disadvantages of a pri

key characteristics of a public listed company

* a public company has its shares freely traded on the Australian Securities Exchange (ASX).
* It is identified by the letters ‘Ltd’ after it’s trading name

advantages of a public listed company

* limited liability
* easier to attract public finance to assist with business growth often through further share issues

disadvantages of a public listed company

* expensive to establish
* greater public scrutiny as financial reports have to be published annually

key characteristics of a social enterprise

* run just as a normal business, however operates with the primary objective to fulfil a social need such as:
* providing employment opportunities for the disadvantaged
* contributing to other causes such as addressing societal issues
* eg, eradicating homelessness, environmental causes etc

advantanges of a social enterprise

* being a social enterprise can provide a point of difference from other competing businesses to help attract customers

disadvantages of a social enterprise

* it can be difficult trying to focus on both social and financial objectives

advantages of a government business enterprise

* provides healthy competition to businesses operating in the private sector - potentially leading to lower prices for consumers

disadvantages of a government business enterprise

* political interference can cause inefficiencies in the way GBE’s are run

liability

the state of being legally responsible for something

unlimited liability

owner is responsible for any and all debts / legal issues

shares

one of the equal parts into which a company's capital is divided, ==entitling== the holder to a proportion of the profits

shareholders

a person or institution that has ==invested== money in a corporation in exchange for a “==share==” of the ownership

Pty Ltd

Proprietary limited - a private listed company

securities exchange

an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments

incorporated

a company formed into a legal organisation

limited liability

owners are treated as separate legal entities to the business

legal entity

an individual, company, or organisation that has legal rights and obligations

limited liability

insolvent

an inability to pay debts owed

bankruptcy

declared by law as unable to pay their debts

Provides healthy competition to businesses operating in the private sector

potentially leading to lower prices for consumers

social enterprise

A(n) ________ is a business that produces goods or services to sell to consumers, but exists to benefit society rather than the owners.

Run just like a normal business, however operates with the primary objective to fulfil a social need such as

Providing employment opportunities for the disadvantaged Contributing to other causes such as addressing societal issues e.g

partnership

A(n) ________ is a type of business that is owned by between two and 20 partners.

sole trader

A(n) ________ is a business that is owned and operated by one person often with the primary objective of making a profit.

Limited liability, meaning the owners of the business are treated as a separate legal entity

important if the business becomes insolvent or declares bankruptcy

separate legal entity

Limited liability, meaning the owners of the business are treated as a(n) ________- important if the business becomes insolvent or declares bankruptcy.

More costly to establish when compared to a sole trader or partnership

accountancy and legal fees etc

Political interference

________ can cause inefficiencies in the way GBEs are run.

public company

A(n) ________ has its shares freely traded on the Australian Securities Exchange (ASX)

Pty Ltd

A private company is identified by the letters ‘ ________ after their trading name.

Directors owners

________ can still be held personally liable if found to have behaved in a fraudulent manner.

Government Business Enterprise

A(n) ________ is a commercial entity that is owned and operated by the government.

private limited company

A(n) ________ is an incorporated business that is owned by between 1 and a maximum of 50 shareholders.

social enterprise

Being a(n) ________ can provide a point of difference from other competing businesses helping to attract customers.