1.2 Types of Organizations

Question 1

Public sector

Answer 1

Businesses owned by the government (usually providing essential goods for objectives other than profit, that would be otherwise inefficiently provided)

Question 2

Private sector

Answer 2

Businesses owned and controlled by private individuals or groups of individuals, usually to maximize profits

Question 3

For-profit commercial organizations

Answer 3

Sole traders, partnerships, and companies/ corporations

Question 4

Sole trader

Answer 4

A business in which one person provides the permanent finance and, in return has full control of the business and is able to keep all the profits

Question 5

Partnerships

Answer 5

A business formed by two or more people with shared capital investment, responsibilities, and decision making ability

Question 6

Private limited company

Answer 6

A business that is owned by shareholders who are often members of the same family; this company cannot sell shares to the general public

Question 7

Public limited company

Answer 7

A company, often a large multinational, with the legal right to sell shares to the general public; its share price quoted on the national stock exchange

Question 8

For-profit social enterprises

Answer 8

Cooperatives, microfinance providers and public-private partnerships

Question 9

Cooperatives

Answer 9

A business owned and run by its members (employees/ customers) that aims to meet the common needs through shared ownership and democratic decision making

Question 10

Microfinance providers

Answer 10

The provision of very small loans aimed at financing disadvantaged members of society

Question 11

Public-private partnerships

Answer 11

The involvement of the private sector, in the form of management expertise and/ or financial investment, in public sector projects aimed at benefiting the public

Question 12

Non-profit social enterprises

Answer 12

Non-governmental organizations (NGOs) and charities

Question 13

Non-governmental organizations (NGO)

Answer 13

A non-profit social enterprise that is not controlled by the government and has a specific aim to tackle issues that benefit society

Question 14

Charities

Answer 14

A non-profit social enterprise that provides voluntary support for good causes (often perform social/ environmental functions that would not be undertaken by private businesses and are dependent on donations, endorsements and promotion)

Question 15

Limited Liability

Answer 15

The only liability - or potential loss - a shareholder has if the company fails is the amount invested into the company, not the total wealth of the shareholder