Unit 6: Classification of businesses

The primary sector

of industry extracts and uses the natural resources of Earth to produce raw materials used by other businesses.

The secondary sector

of industry manufactures goods using the raw materials provided by the primary sector

The tertiary sector

of industry provides services to consumers and the other sectors of industry

A mixed economy

has both a private sector and a public (state) sector

Public sector

the sector of the economy in which organizations are owned and controlled by the state (government)

Private sector

The sector of the economy in which organizations are owned and controlled by individuals

Privatisation

The sale of state-owned assets such as public corporations to the private sector

Sole trader

a business owned and operated by one person

Limited liability

the liability of shareholders in a company is limited to only the amount they invested

Unlimited liability

the owners of a business can be held responsible for the debts of the business they own. Their liability is not limited to the investment they made in the business.

Partnership

a form of business in which two or more people agree to jointly own a business

Shareholders

the owners of a limited company. They buy shares which represent part-ownership of the company

Private limited companies

businesses owned by shareholders but they cannot sell shares to the public

Public limited companies

businesses owned by shareholders but they can sell shares to the public and their shares are tradeable on the Stock Exchange.