Sectors of economy Flashcards
private sector
owned and payed for by individuals or stakeholder
public sector
owned by the government, payed by taxpayers money
third
charity, paid for by donations
private sector aims to …
- maximise profits
- to turn innovative ideas into successful businesses
- to expand the business
public sector aims to …
- provide a high quality service to everyone in the country
- to make good use of tax payers money and provide services needed
The voluntary sector aims to …
- provide support to worthy causes
- to promote awareness of ‘good’ causes
- to provide the best quality of service possible
examples of public sector organisations (name as many as possible)
- police
- local authorities
- hospitals
- fire brigade
- army
- BBC
- schools
private sector organisations …
- sole traders
- partnerships (2-20)
- private limited companies (LTD)
- public limited companies (PLC)
info on private sector organisations
- owned and run by private individuals
- provide a good or service for consumers to purchase
- basic aim is to make a profit
info on public sector organisations
- owned and controlled by local or central government
- main aim is to provide services thought desirable for the public
- main aim is to meet local / national needs
info on public corporations
- run by government
- feed charger for use of services
- set up by act of parliament
- government appointed chair person
- finance obtained by annual grants
info on local authorities
- controlled by elected counsellors
- run by civil services
- fees paid for use of services
- finance obtained by annual grants from central government, council tax and fees
info on charities
- do not aim to make profit
- ‘owned’ by donors
- have to be registered with the charity commission
info on social enterprises
- trade to tackle social problems
- makes money from goods / services sold in open market
- when they profit, society benefits
- have social / environmental aims
- demonstrate social value
- at least 50% of profits goes to social / environmental aims
sole trader advantages
- quite easy and cheap to set up
- the owner makes all the decisions
- the owner keeps all profits
sole trader disadvantages
- harder to get loans from banks
- unlimited liability
- long working hours with few holidays
- sole responsibility
- problems if owner falls ill
partnership advantages
- work load can be shared
- partners will specialise in different areas
- more money can be invested in business
partnership disadvantages
- unlimited liability
- arguments may occur
- profits must be shared
- partners may leave, upsetting the running of the business
why bring in more partners?
- expertise
- ideas
- capital investment
public limited company (PLC)
- a company whose shares are available for purchase by the public on the stock market
- minimum of 2 shareholders
private limited company (LTD)
- a company whose shares are owned privately
- shares are not available to the public on the stock market
- minimum of 1 shareholder
what do PLC’s and LTD’s have in common?
- owned by the shareholders
- controlled by a board of directors
- must produce a memorandum and articles of associations
