3.1.1 Types of Businesses

Question 1

Private Sector Organisations

Answer 1

Owned by individuals. These businesses are driven by profit. The profit from private sector organisations benefits the owners, shareholders and investors. They are financed by private money from shareholders and by bank loans.

Question 2

State-Owned Enterprises (public sector)

Answer 2

A legal entity that is created by a government in order to partake in commercial activities on the government’s behalf. It can be either wholly or partially owned by a government and is typically earmarked to participate in specific commercial activities.

Question 3

For-Profit Organisations

Answer 3

Exists to make profit
Owners keep the profit
Income from sales
A vital part of a free-market economy

Question 4

Not-For-Profit Organisations

Answer 4

Exists to serve society
Have religious, educational, welfare, or charitable purposes
Income from donations, incomes and grants

Question 5

Co-Operatives

Answer 5

Co-operatives are businesses owned and run by their members. Whether the members are customers, employees or residents they are everyday people who have an equal say in what the business does and a share in the profits. … Co-operatives offer a flexible model for new businesses.

Question 6

Joint Ventures

Answer 6

a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance.