1.2 Types of organisations

Question 1

Charities

Answer 1

non-profit social enterprises that provide voluntary support for good causes

Question 2

Cooperatives

Answer 2

for-profit social enterprises set up, owned and run by their members, who might be employees and/or customers

Question 3

A company

Answer 3

a business that is owned by shareholders

Has been issued a certificate of incorporation, giving it a separate legal identity from its owners

Question 4

Deed of partnership

Answer 4

the legal contract signed by the owners of a partnership. The formal deeds specify the name and responsibilities of each partner and their share of any profits or losses

Question 5

Incorporation

Answer 5

there is a legal difference between the owners of a company and the business itself. Ensures that the owners are protected by limited liability

Question 6

Initial public offering (IPO)

Answer 6

when a business sells all or part of its business to shareholders on a stock exchange for the first time

Question 7

Limited liability

Answer 7

a restriction on the amount of money that owners can lose if their business goes bankrupt, i.e. shareholders cannot lose more than they invested in the company

Question 8

Microfinance

Answer 8

a type of financial service aimed a entrepreneurs of small businesses, especially females and those on low incomes

Question 9

Non-governmental organisations (NGO)

Answer 9

private sector not-for-profit social enterprises that operate for the benefit of others rather than primarily aiming to make a profit

Question 10

Partnerships

Answer 10

type of private sector business owned by 2-20 people

they share the responsibilities and burdens of running and owning the business

Question 11

Private limited company

Answer 11

a business owned by shareholders with limited liability but whose shares cannot be brought by or sold to the general public

Question 12

Private sector

Answer 12

the part of the economy run by private individuals and businesses, rather than by the government, e.g. sole traders

Question 13

Public limited company

Answer 13

an incorporated business that allows the general public to buy and sell shares in the company via a stock exchange
limited liability

Question 14

Public-private partnerships

Answer 14

when the government works together with the private sector to jointly provide certain goods or services

Question 15

Public sector

Answer 15

the part of the economy controlled by the government.

i.e. state health and education services

Question 16

Sole trader

Answer 16

self-employed person who runs and controls the business and is the sole person held responsible for its success or failure

Question 17

Social enterprises

Answer 17

revenue-generating business with social objectives at the core of their operations. They can be for-profit or non-profit business, but all profits or surpluses are reinvested for that social purpose rather than being distributed to shareholders and owners

Question 18

State-owned enterprises

Answer 18

organisations wholly owned by the government

Question 19

Stock exchange

Answer 19

a market place for trading stocks and shares of public limited companies

Question 20

Unlimited liability

Answer 20

a feature of sole traders and ordinary partnerships who are legally liable for all monies owed to their creditors, even if this means that they sell their personal possession to pay for their debts