4) Sectors Of The Economy Flashcards
What types of businesses are there within the private sector?
Sole trader Partnership Private limited company (ltd) Public limited company(Plc) Franchise
What types of businesses are there within the public sector?
Central government
Local government
Public corporation
What types of businesses are there within the voluntary sector?
Charities
Voluntary Organisations
Social Enterprises
Features of sole trader
One owner - makes all decisions and keeps all profits
Relatively easy to set up
Business accounts are private
Aims to make profit and survive and grow
Disadvantages of sole traders
Work can stop if owner is ill
Owner is responsible for all business debts (unlimited liability)
Limited finance available
Difficult to get time off
Features of partnership
2-20 partners - bring different skills and knowledge - workload shared
Easier to take time off
Easier to obtain loans
More capital available
Aims to make a profit and survive and grow
What are the three sectors of the economy?
Private
Public
Voluntary
Disadvantages of partnerships
Partners are responsible for all business debts (Unlimited liability)
Possibility of disagreements
Features of a private limited company (ltd)
Usually family owned - private shareholders
Limited liability
Directors appointed to run company
Easier to raise finance
Final accounts are prepared and made available to interested parties
Aims to maximise profits and survive and grow
Disadvantages of a private limited company (ltd)
Profits have to be shared
Can’t sell shares on stock market
Features of public limited company (Plc)
Easy to borrow lots of money
Members of the public can buy shares and access financial records
Can become powerful business
Managed by board of directors
Aim to survive and grow and maximise profits
Disadvantages of a public limited company (Plc)
Costly and complicated to set up
They have no control over who buys shares
Features of a franchise
Less risky - already established
Franchiser provides training img and support
Pays annual fee to use company name
Must use logo, colours and store layout
Disadvantages of a franchise
Strict rules and restrictions
A mistake could impact whole franchise
Can be costly to join
Functions of local government
Education
Leisure
Social work
Housing
