Types of Business

Types of Business

Types of Business Different businesses attempt to do different things, these businesses fall into 3 main types: Private Public Voluntary/Third sector (Known as the Sectors of Economy) Private Sector Ownershi Owned by one or more private p owners who have invested their own money (CAPITAL) in them

Purpose Started in order to provide goods or services Survival In order to survive, a private business must earn more than it spends (make a profit) The following businesses are in the private sector: Research Task Basic Definition

Sole Trader Business owned by one person Can employ other people but run by one person Task 1 Partnership Business owned by 220 people Requires a Deed of Partnership (Partnership Agreement)

What is this? Rules of the business: how it is run, share of profits, partner Homewor responsibilities k Task Private Limited Company (Ltd) Owned by shareholders Unable to buy shares unless you are invited to invest in the

company Have limited liability only lose the money you invested if the company fails Task 3 Franchise Franchise the permission given by one business to another to sell goods or services using its name One

firm (franchisee) pays for the right to run under the name of another (franchisor) Task 2 Public Sector Ownership Funded by government (central and local) and tends to supply public services rather than produce goods. Funded through taxation Purpose The public sector provides a large range of services, for

example: Central Government national health, police, defence. Local Government education, libraries, roads Public Corporations owned and run by state on behalf of people. Nationalised industries. Many have been privatised! Central Government

Organisations National services such as Treasury, Defence, and Health Local Authorities provide services like refuse collection, financed by council tax. Task 4 and 5 Voluntary/Third Sector Ownershi These are not owned by any p

individual people. However, someone will be responsible for ensuring that it sets targets and budgets and does what it was set up to do. Purpose In most instances they try to help particular types of people eg guide dogs for the blind, Oxfam, etc. Survival In order to survive they normally must at least break even (ie spend no more than they take in through fundraising, grants, donations etc.) Charities Government regulates activities and keeps a register of

charities. They are exempt from some taxes. Voluntary Organisations Run and staffed by volunteers. Task 6 Social Enterprise (These can exist in all sectors) Businesses which exist to address social or environmental need, rather than maximising profit for shareholders or owners Co-operatives

Credit unions Housing associations Charities Community businesses Task 7

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