Types of business entities

Question 1

What is a public sector company?

Answer 1

A public sector company is owned and operated by the government to provide services or goods for the public’s benefit.
- Funded by the government
- Provide essential services
- Usually have a social purpose (benefits citizens in some way)

Question 2

What is a private sector company?

Answer 2

A private sector company is owned and operated by individuals or entities (family, friends etc) for profit, separate from government control or ownership.
- Funded by individuals
- Provide products and services that fulfil wants and needs
- Are focused on profit, but can also have a social purpose

Question 3

What is a sole trader?

Answer 3

A sole trader is someone who owns and runs their own business, they have unlimited liability - they can lose more than their investment money (personal money) if the business has financial problems.

Question 4

What are three benefits and disadvantages of a sole trader?

Answer 4

+ control over all decisions, flexibility, easy to set up

• unlimited liability, long working hours, lack of continuity of something happens, limited vacations.

Question 5

What is limited liability?

Answer 5

Limited liability helps protect the owner of the company if the business were to undergo financial issues. The investor would only lose their investment money, they will not lose any personal money etc. They would only get used for what they have invested into the company.

Question 6

What is unlimited liability?

Answer 6

This is when the investor or owner (same shit in this case) are/can be sued for their investment money and more, the gov and others can reach/take their personal properties and money to pay off debts etc. They are liable and can be used, gov, banks and lawsuits have unlimited reach as to where they get the money or goods to pay off the debts.

Question 7

What are for-profit enterprises?

Answer 7

• partnerships
• privately held companies
• publicly help companies.
• sol traders.
  basically doing this for money as main intention.

Question 8

What are for-profit-social enterprises?

Answer 8

• cooperatives
  -public sector companies
  basically companies that are doing this for money but also some type of social status.

Question 9

What are not-for-profit social enterprises?

Answer 9

Non-gov organizations.
Basically organizations that create something for the public to use but they don’t keep the surpluses (left over money) for themselves, they reinvest it back into the company.
This can be political or non-political (single or long term events), however ownership is unclear and donations are important here for the money.

Question 10

Publicly held company?

Answer 10

A company in which a number of shareholders exchange money in return for ownership in the business. The number of shareholders is unlimited. Many people can buy/exchange the stocks of this business, they can be owners and shit, allat stuff can happen and they have more online info thus competitors can see the vibes.

Question 11

Privately held company?

Answer 11

A company in which a number of shareholders exchange money in return for ownership in the business. The number of shareholders is limited, this could be family or friends. There is less info on the business online therefore competition cant see.

Question 12

What is a corporative/cooperation/company?

Answer 12

autonomous association of individuals united voluntarily to meet common economic, social, and cultural needs through a jointly oriented and democratically controlled enterprise.
- When businesses are incorporated, they become legal entities separate from their shareholders

Question 13

what does a public sector provide?

Answer 13

The public sector provides essential services paid for by national and local governments, usually funded through taxes.

Question 14

what is a for-profit commercial enterprise?

Answer 14

a type of business tat earns profits, which are distributed to owners or shareholders; profits may have priority over other objectives.

Question 15

what are the 4 types of for-profit commercial enterprises?

Answer 15

1- sole traders
2- partnerships
3- for-profit privately held companies
4- for-profit publicly held companies

Question 16

what are the 2 types of limited liability cooperations?

Answer 16

There are two types of limited liability companies (corporations):

privately held companies
publicly held companies

Question 17

what is the difference between a privately held company and sector?

Answer 17

A privately held company is one business not on the stock market. A privately held sector includes non-public businesses in an industry.
basically the sector refers to the industry whereas the company refers to the particular business.

Question 18

what are For-profit social enterprises?

Answer 18

For-profit businesses of all types realise that their business objectives now need to focus more on social and environmental sustainability, while still earning the revenues and profits that ensure economic sustainability.

Question 19

social enterprise?

Answer 19

A social enterprise is any organisation that has a social and environmental purpose at its core; it describes the primary purpose of a business, not its legal form. Social enterprises are hybrid organisations that combine the best of the private and public sectors. They are sometimes referred to as a third sector. The term ‘social’ enterprise is a little misleading as many enterprises are also focused on environmental issues, and even those focused on social issues must work to meet human needs within planetary boundaries.

Question 20

what are the challenges that for-profit social enterprises face?

Answer 20

Funding (need to find funds to start their work. )
credibility (Those connected to the business who are not used to an enterprise making social or environmental purpose part of core operations may wonder why the business is not more focused on profit-making)
measuring impact (measuring social or environmental impact is more difficult and may involve qualitative data that is harder to interpret.)
managing complex supply chains (all areas of the supply chain are operating in line with the values of the business)
reminding true to purpose (it may be difficult to maintain focus on its purpose. )

Question 21

distinguish between the private and public sectors

Answer 21

Private sector comprises privately-owned businesses, driven by profit. Public sector includes government organizations delivering public services, funded by taxpayers.

Question 22

examine different forms of for-profit and non-profit social enterprises

Answer 22

For-profit social enterprises, like B Corporations, blend profit and social missions. Benefit corporations prioritize a positive societal impact alongside financial success. In contrast, non-profit social enterprises, such as NGOs or charities, primarily focus on social or environmental causes without profit generation as a primary goal, relying on donations and grants.

Question 23

compare and contrast the sole trader, partnership and corporation forms of ownership

Answer 23

Sole trader is one owner, partnership has multiple owners, while a corporation offers limited liability and separate legal status. Corporations can attract more capital but involve complex regulations.