Different forms of business Flashcards
What are public sector organisations?
Organisations owned by the government to provide a service to the public.
What are advantages of public sector organisations?
Provide essential services
Greater job security
What are disadvantages of public sector organisations?
Inefficient as not driven by profit
Lack of competition
What are private sector organisations?
Organisations owned by private individuals or companies to make a profit.
What are advantages of private sector organisations?
Generates employment
Competitive which leads to better quality
What are disadvantages of private sector organisations?
Some have high set up costs
Unstable employment
What is unlimited liability?
When the owner is personally responsible for all the business’s debts.
What is limited liability?
When the owners are only responsible for the amount they invested in the business.
What is a sole trader?
A business owned and run by one person.
What are advantages of being a sole trader?
Easy to set up
Keep all profits
Full control
What are disadvantages of being a sole trader?
Unlimited liability
Difficult to raise finance
What is a partnership?
An arrangement between 2 or more people to share ownership, profits and liabilities.
What are advantages of partnerships?
Shared responsibility
Access to more knowledge and skills
What are disadvantages of partnerships?
Unlimited liability
Shared profits
What are private limited companies (Ltd)?
Organisations owned by shareholders where shares are not available to the public.
What are advantages of private limited companies (Ltd)?
Limited liability
Confidentiality
What are disadvantages of private limited companies (Ltd)?
Can’t sell shares to the public
Shared ownership
What are public limited companies (PLC)?
An organisation that has offered shares to the public.
What are advantages of public limited companies (PLC)?
Limited liability
Easy to raise capital
What are disadvantages of public limited companies (PLC)?
Loss of control
Pressure to perform
What are non-profit organisations?
Organisations created for charitable purposes, not to make a profit.
What is an advantage of non-profit organisations?
Tax exemption.
What is a disadvantage of non-profit organisations?
Limited funding.
What is ordinary share capital?
Money raised by selling shares.
