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Private Sector

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Notes-BS Notes - chapter 3 BUSINESS ORGANIZATIONS: THE PRIVATE SECTOR * Sole traders * Partnerships * Private limited companies * Public limited companies * Co-operatives SOLE TRADERS: * Common form of business organization Few legal requirements to be set up * Few legal regulations to worry about when setting up the business * Complete control over the business * Close contact to customers * Does not have to share profits * Complete secrecy in business matters * No one to discuss business matters with * Unlimited liability * Limited source of finance * Capital for expansion may be restricted * Unincorporated business PARTNERSHIPS: * Group or association of 2 and 20 people who agree to own and run a business together. ...read more.


with * Shares in a LTD cannot be sold or transferred to anyone else without the agreement of the other shareholders . * Accounts of a company are much less secret PUBLIC LIMITED COMPANIES: * Most suitable for very large businesses * Limited liability to shareholders * Incorporated business * No limit to the number of shareholders a PLC can have * No restriction of transfer of shares * Usually has high status * Legal formalities are complicated and time consuming * Become difficult to control and manage * Selling shares to the public is expensive CO-OPERATIVES: * Groups of people who agree to work together * All members have ONE vote * Workload and decision making are shared * Profits are shared equally amongst members JOINT VENTURES: * When ...read more.


organization * The members are also the managers * Offers limited liability and continuity * Not suitable form of organization for a large business * Members may disagree over decision-making Franchising BUSINESS ORGANIZATIONS: THE public SECTOR PUBLIC CORPORATIONS: Objectives: o To keep prices low o To keep people in jobs o To offer a service to people in all areas of the country * Owned by the state or central government * Usually businesses which have been nationalized * If an important business is failing, the government can nationalize it * Government ownership is thought to be essential * No private shareholders to insist on high profits, thus profit motive may not be that powerful * Often there is no close competition so lack of incentive to increase consumer choice ...read more.

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