24 terms

types of business entity

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legal structure of a business
how the ownership of the business is registered
sole trader
an unincorporated business with one owner
owners' equity
the owners' financial claim on the assets of a business. it is the original investment the owners made into the business by contributing capital or buying shares, plus any profit the business makes. Also called proprietorship or proprietors' funds
unicorporated businesses
sole traders and partnerships. These are businesses that are not companies because they have not gone through the legal steps for incorporation
unlimited liability
if a business has unlimited liability, the owner of the business is personally responsible (liable) for debt incurred by the business
Partnership
An unincorporated business with more than one owner
private company
a business that has limited liability and between one and 50 owners
shareholders
owners of a company. They provide the capital that allows the company to operate
limited liability
If a business has limited liability, the owners (shareholders) are not personally responsible for the debt incurred by the business
public company
A business that is listed on the Australian Stock Exchange and has ownership open to all members of the public. Public companies have limited liability
Dividends
The income earned from owning shares in a company. It is usually paid every three months and is based on the profits the company makes
Prospectus
A document that describes the nature of the business, its financial performance and possible risks that the business may face. It is issued to possible investors
primary industry
Businesses involved in the acquistion of raw materials, including natural resources.
secondary industry
Businesses that use raw materials as well as labour and capital equipment to create finished products.
tertiary industry
Businesses whose prime function is related to providing a service
quaternary sector
Tertiary sector businesses that provide infomation services
quinary sector
Tertiary sector businesses that provide services that are tradionally performed in the home
Public sector businesses
Businesses that are owned by the government and provide the community with essential goods and services
Private sector businesses
Businesses that are not owned by the government. They are owned by a private group of individuals
international business
A business that has both its ownership and production based in one country. The business exports its products to other countries
Transnational business
A business that operates in many countries. Its goodsnand services are produced and sold in a number of different countries
Demutalisation
The process of offering shares in a business to members. The organisation becomes a shareholder-based organisation rather than an organisation controlled by members
corporatisation
The process of government businesses being managed based on private sector principles
Privatisation
A process transferring the ownership of a government business to the private sector by issuing a prospectus and listing the business on the Australian Stock Exchange as a public company
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