1. Types of business

Private sector businesses

Operated & owned by private individuals and companies, and are usually for profit.

Public sector businesses

Owned & run on behalf of the public, either by the Government or organisations that it funds, and usually have another objective other than profit.

Sole traders

are businesses that are owned and controlled by one person

• Sole traders and partnerships are unincorporated businesses - unlimited liability. The owner and the business are considered one, and any debt/financial problems can mean the owner loses personal possessions (mortgage, shares, pension)

Partnerships

are firms where two or more people own the business

Private limited companies

issue shares to family/friends (people known to owners)

Public limited companies

issue shares to the public to raise funds, listing shares on one or more stock exchanges to provide liquidity

Limited companies

Both are required to report finances, and follow regulatory requirements like corporate governance standards

Limited companies are firms owned by shareholders (owners and company are considered separate) - limited liability, which is legal protection to the shareholders (meaning they only lose the amount invested in the business)

Co-operatives 

A firm owned, controlled & operated by a group of users, such as the workers, for their own benefit.

They each contribute by buying shares in the co-op but have control of the firm on the basis of a one-member, one-vote principle rather than having votes in proportion to the number of shares owned

Joint venture

Where a separate business entity is created by 2 or more parties. It involves sharing ownership, returns and risks of the new project.