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Questions and Answers
What is the definition of a small business?
What is the definition of a small business?
A business that employs up to 19 people.
What is the employee range for a medium-sized business?
What is the employee range for a medium-sized business?
20 to 199 employees.
What classifications can businesses have based on their legal structure?
What classifications can businesses have based on their legal structure?
- Unincorporated (correct)
- Incorporated (correct)
- Both (correct)
- None of the above
A small business is defined as one that employs up to 15 full-time employees.
A small business is defined as one that employs up to 15 full-time employees.
Which of these is NOT a type of small business?
Which of these is NOT a type of small business?
A small business can be classified as a __________ or a partnership without employees.
A small business can be classified as a __________ or a partnership without employees.
What is the small business revenue threshold adjusted to?
What is the small business revenue threshold adjusted to?
What key area do SMEs contribute significantly to?
What key area do SMEs contribute significantly to?
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Study Notes
SMEs in the Australian Economy
- SMEs play a key role in the Australian economy, and anyone can start a business if they have the desire and determination to be their own boss.
- To be successful, a new business owner must develop a unique quality that gives their business a sustainable competitive advantage.
Definition of SMEs
- A small business is defined as one that employs up to 19 people, including:
- Non-employing businesses (sole proprietorships and partnerships without employees)
- Micro businesses (up to 4 people)
- Other small businesses (5-19 people)
- A medium-sized business employs between 20 and 199 people.
- A large business employs 200 or more people.
Alternative Definitions of SMEs
- The Fair Work Commission defines a small business as one with up to 15 full-time employees.
- Other definitions are based on:
- Value of production or turnover
- Asset value
- Total revenue (e.g. earning less than $50 million per year)
Legal Structure of SMEs
- SMEs can be classified as unincorporated or incorporated entities.
- Unincorporated entities:
- Do not have a separate legal identity from their owners or members
- Examples: sole traders, partnerships
- Incorporated entities:
- Have gone through a formal legal process to become a distinct legal entity separate from their owners or members
- Examples: private companies, public companies, trusts, religious organisations, government-owned businesses
- Some SMEs can be both unincorporated and incorporated, with owners who manage and supply capital and make decisions.
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