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Types of business entities - Coggle Diagram
Types of business entities
Private sector
The private sector is the part of the economy run by private individuals and businesses, rather than by the government, such as sole traders, partnerships, privately held companies and publicly held companies.
Public sector
The public sector is the part of the economy controlled by the government. Examples include state healthcare and education services, the emergency services, social housing and national defence.
Types of organization
Sole trader
A sole trader is an individual who owns his/her personal business.
Advantages
few legal formalities
Profit taking
Being your own boss
Personalised service
Privacy
Quicker decision-making -
Disadvantages
Unlimited liability
Limited sources of finance
High risks
Workload and stress
Limited economies of scale
Lack of continuity
Partnerships
partnership is a for-profit private sector business owned
by two or more persons.
advantage
Financial strength -
Specialisation and division of labour
Financial privacy
Cost-effectiveness
Disadvantages
A lack of continuity
Unlimited liability
Prolonged decision-making
Lack of harmony
Privately held companies
Companies are businesses owned by their shareholders. Shareholders are individuals or other businesses that have invested money to provide share capital for a company or corporation.
Disadvantages
Communication problems
Added complexities
Compliance costs
Disclosure of information
Loss of control
Bureaucracy
Advantage
Limited liability
Raising finance
Continuity
economies of scale
Productivity
Tax benefits
Publicly held companies
Whilst a publicly held company shares many similarities with a privately held company, it is able to advertise and sell its shares to the general public via a Stock Exchange.
For-profit social enterprises
revenue-generating businesses with social objectives at the core of their operations.
Private sector companies
they earn their revenues and financial surpluses in socially responsible ways. To benefit the society, a social business organization conducts
Public sector companies
Public sector for-profit social enterprises are state-owned enterprises run in a commercial way.
Corporative
Cooperatives are for-profit social enterprises owned and run by their members, such as employees or customers, with the common goal of creating value for their members by operating in a socially responsible way.
Non profit organization
businesses run in a commercial-like manner but without profit being the main goal. Instead, non-profit organizations use their surplus revenues to achieve their social goals rather than distributing the surplus as dividends to its shareholders or owners.