Sole tradership is when the business is fully owned and managed by one person, though others can be employed to help run the business. As the sole traders only financial income is from the business and/or bank loan, they do not have the resources to expand and cover regional or national areas. These types of businesses are located in the small business sector and usually cover local areas. Such businesses could be hairdressers, corner shops or market stalls etc. Sole traderships have unlimited liability so if the business fails to pay its debts the financial responsibility falls on the owner/s to pay the debts in full even if they have to sell their business, personal possessions and assets.
Another example of business ownership is a partnership. Examples of partnerships used in business are accounting firms and solicitors firms. A partnership has two or more owners. They work, manage and are responsible for the running of the business. Individual partners may concentrate on a certain aspect of the business where they have expert knowledge. As there is more than one owner, larger amounts of capital can be fed into the business via personal funding or bank loans. Partnerships have an unlimited liability.
There are two types of limited companies: Private and public. Shareholders own private limited companies. Members of the public cannot buy the shares and the shareholders cannot buy or sell their shares without agreement from the other shareholders. Family owned businesses or larger businesses such as Virgin would fit into this category. Public limited companies have shares on the stock market and can be bought and sold by any member of the public, this way the company can raise further capital and expand their resources. Tesco and British Telecom are such examples. Both these types of limited companies have limited liability, which means the owners of the business are only liable for the amount they invested in the business (unless the debt is so large that the business has to be sold to repay the debt).
Co-operatives are companies that are owned by a group of people (members) who have shares in the company. Shares can start as little as £1 and each member has a share in the Co-operative. It is the members (shareholders) who finance the co-operative and they control on how the business and profits are run. They may have limited liability.
Central and local government also run organisations: this means that they are state owned and controlled. Some examples of central government ownership are the National Health Service and the police force. The local government control state-run hospitals, libraries, schools and colleges. Allocations of funds are paid through taxes to the government so these organisations run on a budget. To generate extra income for resources, some organisations charge a fee. For example the National Health Service charge prescription fees and colleges charge enrolment fees etc. However the aims of these organisations is not to make a profit but provide necessary services for society. Another type of organisation is the public corporation, which receives government funding; some examples are the Post Office and the BBC. These organisations provide essential services.
The role of the public sector is to provide essential and necessary services for the public. It consists of organisations owned and operated by central or local government. The Organisations which provide such services within the sector include: government departments, the National Health Service, Social Security, police, military, Post Office, BBC, Inland Revenue, housing departments etc. As this sector of business is fundamental for the basic running of the country, I believe the growth of this sector will be steady. However, political agendas have to be taken into consideration. For instance a change in government...