Exploring the Types of Business Organisations Essay example

Exploring the Types of Business Organisations Essay example

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Exploring the Types of Business Organisations

There are two Business Sectors:

Public Sector

These are businesses owned and run by the government. Some examples of
Services provided in the public sector are the postal service,
schools, colleges, housing environment, some bus and train services,
fire, police, ambulance and local justice and social services. Their
method of raising capital is different as Private Sector businesses
have to raise their own capital e.g. their own money, a bank loan etc.
The Public Sector business can get the money required from the
Treasury or from local rates. There is no individual owner in the
Public Sector.

Advantages:

· Their main aim is to provide a service, not to make a profit

· They will still run even if there is few people using the service

· Government is in a good position to plan the overall provision for
the country

Disadvantages:

· It is difficult to motivate employees in an impersonal business such
as this

· The tax payer has to meet higher tax payments if the business makes
a loss

· The running of the business can be politically influenced.

Private Sector

These are businesses owned and run by private people. To start a
business in the Private Sector, they have to raise their own capital
in order to pay for rent, stock, machinery etc. Some of these
businesses can be small and owned and run by one person, other
businesses can be larger and run by a group of people. Forms of
Private Sector ownership are: Sole Trader, Partnership, Private
Limited Company, Public Limited Company, Franchisee, and
Co-operatives.

Sole Trader

These are...


... middle of paper ...


...ility. This is why many small businesses that
have only a small number of partners will change their business
ownership and become a private limited company.

Background Information

When Mac and Dick McDonald first ran their restaurant in San
Bernardinosuccessfully for 21 Years it was a form of partnership, in
which they made high profits which they were happy with. Most
successful businesses like this would expand but Mac and Dick McDonald
didn't. It only expanded when Ray Kroc had brought McDonalds from Mac
and Dick McDonald. In other words if Mac and Dick McDonald had their
own way McDonalds would never have been a global multi-billion dollar
business. We can clearly see that because the size of McDonalds had
increased this has caused the type of ownership to change from
partnership to public limited company.

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