1.2 TYPES OF ORGANISATIONS (Business activity (Public sector (controlled…
1.2 TYPES OF ORGANISATIONS
controlled by central or government
public limited companies
private limited companies
owned/controlled by individuals or more
a business with mainly social objectives that reinvest most of its profits into benefiting society rather than maximixing returns to owners
organisation that has aims other than making and distributing profit and which is usually governed by a voluntary board
non governmental organisations (NGOs)
one person provides the permanent finance and in return, has full control of the business and is able to keep all of the profits
Advantages: easy to set up, owner has complete control and keeps all profit, able to choose working patterns and times, can be based on interest, able to create close personal relationship with staff.
Disadvantage: unlimited liability, intense competition, difficult to raise additional capital, long hours are often needed, lack of continuity
formed by 2 or more people to carry a business together, with shared capital investment and responsibilities
Advantages: wider specialised areas of business management, shared decision making, additional capital, business losses are shared, greater privacy and fewer legal formalities
Disadvantages: unlimited liability, profits are shared, no continuity, bound to decisions of each other, not able to sell shares, lose indepenedence of decision making.
Private limited companies
small to medium sized business that is owned by share holders who are often family members because they cannot sell shares to the public
Advantages: limited liability, separate legal personality, continuity in the event of death of a shareholder, able to raise capital through selling shares, greater status
Disadvantages:legal formalities, capital cannot be raised by sale of shares to the general public thus difficult to sell share, end of year acc must be sent to Companies House.
Public limited companies
a large business with legal right to sell shares to general public,
Advantages: limited liability, separate legal personality, continuity in the event of death of a shareholder, ease to raise capital through selling shares,
Disadvantages: legal formalities, cost of business consultants and financial advisers when creating a plc, share prices subject to fluctuation, legal requirements concerning disclosure of information to shareholders and the public, risk of takeover, directors influenced by short term objectives of major investors
Main types of Public private partnership