Unit 1.2- Understanding different business forms Flashcards
What is the public sector?
public sector is owned and run by the government
What is the private sector?
private sector is own by private individuals like you and me.
What are the three types of public sector businesses?
- Public corporations
- Public services
- Municipal services
What is a public corporation?
Enterprises owned by the state but offer products to both public and private sector.
What is a public service?
This provides a service to the nation
What is a municipal service?
these are offered by local governments and councils
What is privatisation?
When the state(government) sells businesses that they had owned and managed to private individuals and businesses
Why would the government privatise?
- Raises finance for government
- Privately run businesses are more efficient
What is a sole trader?
A sole trader is a business that is owned and managed by one person
Features of a sole trader
Easy and cheap to set up Unlimited liability Sources of finance are limited Long hours Be their own boss Make all decisions Keep all the profits No continuity No specialist skills Stressful Financial information kept private
What is a partnership?
To form a partnership there must be at least two people.
