1.2 TYPES OF BUSINESS ENTITIES _ IB BUSINESS MANAGEMENT _ public & private sector, social enterprise [hYJxdbtD1y0] (1)

Types of Business Entities

Overview

  • Focus on three main parts:

    • Private and Public Sector

    • Companies, Sole Traders, and Partnerships

    • Social Enterprises

  • Four assessment objectives to understand:

    • AO 1: Understanding basic business concepts

    • AO 2: Distinguishing between private and public sector

    • AO 3: Exploring different types of business entities

    • AO 4: Evaluating business practices

Private and Public Sector

  • Public Sector:

    • Examples: BBC, NASA

    • Focuses on providing services to the public, often funded by taxpayer money

  • Private Sector:

    • Examples: Netflix

    • Primarily focuses on profit-making through privately owned businesses

Key Business Terms

  • Liability: Defines the extent of financial responsibility of an entity

  • Legal Identity: The entity's recognition in the eyes of the law

  • Incorporation: The process of legally declaring a corporate entity separate from its owners

  • Transparency: The clarity and openness in operations and financial dealings

  • Corpus: Refers to the funds or assets held by a business entity

Types of Business Structures

  • Sole Traders:

    • Owned and operated by a single individual

  • Partnerships:

    • Involves two or more individuals sharing ownership

      • Sleeping Partners: Invest without active involvement

  • Companies:

    • Managed by a Board of Directors (BOD)

    • CEO oversees daily operations

    • Types:

      • Privately Held Companies

      • Publicly Held Companies

    • AGM (Annual General Meeting) and EGM (Extraordinary General Meeting) for stakeholder discussions

    • IPO (Initial Public Offering): The first sale of shares to the public

Social Enterprises

  • Focus on social objectives along with profit

  • Examples include cooperatives and NGOs

  • Note on Fun Fact: Businesses such as LEGO in China generate significant revenues, e.g., $85 million

Evaluation and Resources

  • Discussion on evaluations, including case studies like Swift K03, Eat Teachers, Arena, and Matcha

  • Encourage interaction: Subscription, comments, and questions are welcome for further clarification.