Four factors of production:
Land
Labor
Capital
Entrepreneurship
Triple bottom line:
3Ps
People
Profit
Planet
Corporate social responsibility
CSR
Going beyond the minimum legal requirements
Decision making that considers benefits and costs not just shareholders
How business impacts a wilder world and aspire to impact positively
Ethically
Contribute to economic development and improve the quality of life for workers and their whanau.
private limited company
Adv
Dis
Advantages
-Limited liability
-Separate legal identity
-Continuity in the event of the death of shareholder
-Ease of buying and selling of shares (encourages investment
Disadvantages
-Legal formalities in setting up company
-Legal requirements. More rules and regulations. This includes the -publication of accounts and the need to have them audited.
-Directors objectives vs shareholders objectives
Who owns Limited Company?
Shareholders.
Each shareholder has a share in the company.
Objective of business
Survival
Profit satisficing
Profit maximisation
Growth
Public Limited Company (PLC)
A company whose shares are traded publicly on the stock exchange.
What are benefits of going from Partnership to Limited Company
Limited liability, (protecting personal assets from business debts)
Easy access to capital through the sale of shares.
Private Limited Company (Ltd)
A company owned by shareholders with limited liability. Shares are not publicly traded.
Sole Trader
A business owned and operated by one person.
What is the main difference between a sole trader and a partnership?
A sole trader is owned by one person, while a partnership is owned by two or more people.
Why might someone choose to form a private limited company instead of remaining a sole trader?
To benefit from limited liability, protecting personal assets from business debts.
Explain the concept of limited liability
Limited liability means owners are only responsible for business debts up to their investment, protecting personal assets.
Assets
They are the resources owned by a business
Eg cash, equipment, inventory, and accounts receivable.
Liabilities
Liabilities are obligations that a business owes
Eg loans, accounts payable, and mortgages.
Equity
Eg owner’s capital, retained earnings, and common stock.
Equity increased by owner investments and net income,
decreased by withdrawals and net losses.
Revenues
Income earned by the business
Eg sales of goods or services. sales revenue, service revenue, and interest income.
Expenses
Costs incurred by a business in the process of earning revenue.
They are the outflow of assets or incurrence of liabilities.
A: Assets
Exp: Expenses
D: Drawings (also known as Owner’s Withdrawals)
L: Liabilities
I: Income (also known as Revenue)
OE: Owner’s Equity (also known as Equity)
What are needed for CGA
Goods must meet description
There is a breach to CGA if products do not meet description
Define Consumer Guarantees Act (CGA).
A law ensuring consumers receive guarantees for goods and services purchased in New Zealand.
True or false: The CGA applies to all goods sold in New Zealand.
FALSE
The CGA does not apply to goods purchased for resale or business use.
Fill in the blank: The Fair Trading Act prohibits _______ advertising.
misleading
What is a key principle of the Fair Trading Act?
Businesses must not mislead consumers about products or services.
