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1.2 Types of Business Entities - Coggle Diagram
1.2 Types of Business Entities
Private and Public sectors
Private
Managed by individuals and companies, not owned by the government
Public
Contolled by government
Main features of profit-based organizations
Partnership
Managed by two or more person
Advantages
greater stabilty and lower risk
help in emergencies
more different skills
Disadvantages
uunlimited libaility for each
less access to loans
profits must be shared
Sole trader
Managed by just one person (the owner)
Disadvantages
competing against business alone - stress
limited capital
unlimited liability
Advantages
privacy
flexibility: work hours, products, services, changes
complete control of decisions
Companies
Publicy held companies
offer shares in a public space
Privately held companies
sell shares in the company privately
Advantages
Continuity
Expansion possibilities
Investor: limited liability
Disadvantages
Owner risk partial
Loss of privacy
Take time and cost
Shareholders
Owner of a company's stock or in a mutual fund.
Advantages
Portion of the profits as dividends
Price of shares increase in value if the company is well
Limited liability
Disadvantages
As oweners own only a fraction of the shares
Price of shares decrease in value if the company is not too well
Types of profit social enterprise
For-profit social enterprise
social purpose
improve: human, social or environmental well beings
Advantages
Foster: philantrophic spirit, informed discussions
Can innovate
Help people/causes in need
Disadvatages
Intense lobbying; undesirable goods
Funding: irregular
Examples
Charities
NGOs
Non-profit social enterprise
not aim for profits at all, but social purpose
surplus: to advance the purpose
Advantages
Legal status
Strong communal identity
Stakeholder community benefits
Disadvatages
Capital: insufficient: growth
Time and decisions: complex
Capital: insufficient: financial growth
Examples
Public sector companies
Cooperatives
Private sector companies