CHAPTER 1 TYPES OF BUSINESS
1. Private Sector Organisation
Private sector organization involve ownership of the company for which the
government does not have any hand in it. The owners of a private sector
company are called shareholders.
The smallest kind of private company is call a sole trader or sole proprietor.
This is a one man / women show. The owing is also the operator of this sole
proprietor ship. This type of company will only run when the owner of the
business is not ill. Most of the time they are have limited access to banks and
funding as they are small and they also have a small turnover (sales). Examples
of such sole properties will be small noodlles or a small stall selling drinks on
the street. There are also small business or sole proprietorship that are
profitable as well and may have a decent amount of sales eg. Professional
consultants like financial consultants.
For this form of business their borrowing or libailites from banks and other
entitites they borrow from is the sole responsibility of the sole proprietor.
Eg the company is called ABC . ABC borrows $500,000 from a bank and is not
able to pay up. This would mean that the sole proprietor will be responsible to
pay up the outstanding loan suggestion unlimited liabilities.
Partnerships are also private organizations.
A partnership is often formed by mor than 1 person . This often would be
formed by 2 or more people, and each will contribute theirs skills and funds ot
the business. This type of private organization structure is often seen in
professional consultancies like law firm, accounting firms like Price waterhouse
, engineering firms etc. The maximum number of partners in a partnership is
20 . This structure of private organization is better than the sole proprietor as
the liabilities is spread out over the partnership and not solely borne by 1
person. The amount of liabilities each partner has to pay is propionate to the
share each partner has invested in the firm.
Private Limited Company (often companies that end with the word Private
Limited)
1. Private Sector Organisation
Private sector organization involve ownership of the company for which the
government does not have any hand in it. The owners of a private sector
company are called shareholders.
The smallest kind of private company is call a sole trader or sole proprietor.
This is a one man / women show. The owing is also the operator of this sole
proprietor ship. This type of company will only run when the owner of the
business is not ill. Most of the time they are have limited access to banks and
funding as they are small and they also have a small turnover (sales). Examples
of such sole properties will be small noodlles or a small stall selling drinks on
the street. There are also small business or sole proprietorship that are
profitable as well and may have a decent amount of sales eg. Professional
consultants like financial consultants.
For this form of business their borrowing or libailites from banks and other
entitites they borrow from is the sole responsibility of the sole proprietor.
Eg the company is called ABC . ABC borrows $500,000 from a bank and is not
able to pay up. This would mean that the sole proprietor will be responsible to
pay up the outstanding loan suggestion unlimited liabilities.
Partnerships are also private organizations.
A partnership is often formed by mor than 1 person . This often would be
formed by 2 or more people, and each will contribute theirs skills and funds ot
the business. This type of private organization structure is often seen in
professional consultancies like law firm, accounting firms like Price waterhouse
, engineering firms etc. The maximum number of partners in a partnership is
20 . This structure of private organization is better than the sole proprietor as
the liabilities is spread out over the partnership and not solely borne by 1
person. The amount of liabilities each partner has to pay is propionate to the
share each partner has invested in the firm.
Private Limited Company (often companies that end with the word Private
Limited)
