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Types of Businesses :
Distinguish between Private and Public Sector
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Types of Businesses :
- Distinguish between Private and Public Sector
-Outline Features of the types of for-profit organizations
Private Sector
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create employment, help development and growth of economy and provide wide variety of goods and services
Public Sector
Tax Run Buisness
TAX RUN BUISNESS INCLUDES ALL THE INVESTMENTS MADE IN A CERTAIN BUISNESS; HEREALTHCARE, HOSPITSLS, SCHOOOLS ARE ALL FINACED FROM THE TAXES THAT THE CITEZENS PAY
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These services are underprovided by the private sector since they are not profitablle to provide, or are unaffordable to some members in society
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provides health care, education and emergency services
governments also run and own universities, museums, hospitals, embassies, immigration services, and custom offices.
Sole Trader
Unlimited Liability: A sole trader is personally liable for his own debts, paying them out of your own income. If a sole trader does not pay off his debts, the creditors you owe money to could take action against you personally, leading your business and personal assets at risk.
Advantages:
-Flexibility since its run by one person.
-Less paperwork
-Simplified taxes.
-Greater privacy.
-No sharing of profits.
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A business owned and run by one person; there is no legal separation between the owner and the business.
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Partnership
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Well Known Examples: - Medical practices, Uber and Spotify, Apple and Mastercard, Yeezy, Amazon and American Express.
A partner has unlimited personal liability for any and all debts and obligations of the business. Each partner reports their share of business profits and losses on their individual tax return and pays any taxes due. The partnership itself isn't subject to taxation.
A partnership involves the creation of a business by two or more individuals, or partners. Partnerships are governed by partnership agreements, which define the ownership interests of the different partners, as well as how major decisions will be made by the partnership
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Privately Held Companies
Advantages: limited liability, more power/control for shareholders, greater access to finances, private financial records.
Disadvantages: 1. Profits are shared among mutiple shareholders. 2. In order to reach a decision all shareholders must agree. 3. Offering shares publicly cannot be used to raise finances. 4. More upfront funds are required to start and run a privately held companies compared to public.
Companies whose shares are not publicly available for public purchase, and are instead traded privately.
The private sector are businesses owned and controlled by individual people, with the aim being to make profit.
Shareholder: A person who owns shares in a company and therefore gets part of the company’s profits and the right to vote on how the company is managed
examples of private held companies include: Walmart, Cargill, Lego and Deloitte
The level of liability is still high, but lower than for public sectors. Meaning that a liability exists where a legal obligation occurs.
Liabilities can include loans that have been made to a private trust or private company, or debts owed by a private trust or private company, where the entity is legally obliged to repay the debt or loan.
When shareholders are present, they are only at rick of loosing how much their share is worth.
Publicly Held Companies
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pros
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They allow increased growth opportunities because their method of financing allows for more expansion.
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Social Enterprises:
For-Profit Organizations
Cooperatives
A business owned and operated by its members, who share the profits.
These members run the organisation in their common interest, using democratic governance. All members participate in decision-making either directly by voting on important decisions or through representation, where members elect representatives to make decisions for them.
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Cooperatives can be classified either by the type of industry or by who owns and runs them.
Examples of types:
-Education
-Retail
-Agriculture
-Banking
-Housing
-Health Care
-Utilities
-Education
-Insurance
Public Sector
A type of social enterprise that produces goods and services that are typically provided by the public sector.
These social enterprises bid for contracts with regional or local governments, who outsource some essential services to for-profit businesses.
Examples:
-Recycling businesses
-Tree removal services
-Snow and ice road maintenance
-Streetlight installation and upkeep services
governments may be able to lower their costs and focus on other areas of public services. For their part, the businesses can look forward to consistent demand for the essential services they provide. However, governments must maintain some oversight to ensure that the service is being carried out as expected, and they must ensure that if the business runs into financial trouble, the public will not lose access to the service.
Private Sector
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A type of social enterprise that produces goods and services that are typically sold in markets for a price by for-profit businesses.
Challenges:
-Funding
-Credibility
-Measuring impact
-Managing complex supply chains
-Remaining true to purpose
Advantages:
-make a positive impact on the world through their core work, meeting their ethical responsibilities to people and the planet.
-they generate revenues and profits, for-profit social enterprises are more economically sustainable compared to non-profit social enterprises, which often depend on grants, donations or government financial support that may be unstable.
-for-profit social enterprises attract an increasing number of customers, investors and talented employees who value sustainable and responsible businesses.
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Public hospitals, police, public transportation
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