105 Flashcards
(20 cards)
Public Sector
Business that are owned and run by the government. Public services e.g NHS, education, police are business organisations run by the government. They are run to provide and service and not make a profit
Private Sector
Businesses that are owned by shareholders and individuals and are run to make a profit e.g tescos
Private sector business aims
Survival, growth, profit
other business objectives
increase shareholder value, ethics, increase market share
Public sector main aim
provide services other businesses would not provide e.g streetlighting or would not provide in a way that everyone would be able to afford them
other public sector aims
Provide employment, provide goods and services
Public goods
something that is difficult for a business to make profit off of e.g streetlighting
Merit goods
businesses can make a profit off these and have a positive affect on all of society
Advantages of public sector
provides good ls and services to those who cant afford, provides employment
Disadvantages of public sector
is a monopoly power, paid via taxes
Advantages of private sector
means there is competition so businesses will make better products for consumers
Disadvantages of private sector
Not all consumers may afford price, some goods would not be offered at all
Sole trader
Business owned by one person, normally a small business, rely on their own savings, unlimited liability
Partnerships
2-20 owners, e.g lawyers, unlimited liability, if one dies it can cause complications
Private limited company
owners are now called shareholders, they have limited liability, expect to be paid dividends, business continues if owner dies
Public limited company
sell public shares, shareholders have limited liability, whoever has 51%+ of shares has full control
unlimited liability
If business fails then owners are liable for all the debts and have to pay those debts
limited liability
if business fails then shareholders only lose the amount of money they invested
Unlimited liability structures
sole traders
partnerships
the owner and business are viewed by the law as the same
Limited liability structure
Private limited companies (LTD)
Public limited companies (PLC)
the business and shareholders are viewed as separate
