size and form of business

private sector

• owned by shareholders and private individuals

• most businesses in UK

• driven by profit motive (most)

• determined by market forces

50/50 (aspects of both)

• NHS

public sector

• owed and funded by national or local gov

• account for 19% of UK employment

• driven by public interest

• made up of public corp action public services and municipal services

Business forms

• Sole traders

• Private limited company

• Public limited company

• non-profit organisation

sole trader

• easy to start up- no registration

• requires wide range of skills

• own boss but long hours

• unlimited liability

• keep all profits

Private limited company

• must go thru process of incorporation

• limited liability

• customers may trust a limited company more than sole traders

• wider access to capital - easier to borrow money as a limited company

public limited company

• can raise capital through selling shares to public

• size measured by market capitalisation

• ability to take control of the business

• pressure to pay dividends to its shareholders

non-profit organisations

• business may be set up as a charity- may be exempt from paying tax

• business may take form of a mutual, a mutual can take any legal form but is distinguished as it is run for benefit of members (employees, customers or community)

incorporation

• involves registry of a business with companies house and includes documents such as memorandum of association and articles of association

Limited liability

• where liability of owners is detached from company

• shareholders can lose investment in event of financial difficulties but personal belongings are safe

• unlike w limited where no distinction between individual and business