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Two Sectors
Made up of central government, local government, and businesses that are owned by
government
In the last twenty years the number of government-owned firms in the UK has shrunk massively
Now, very few examples remain: for instance, the Royal Mail
Co-operatives are owned by their staff, who are ‘members’ of the firm
Profits are shared amongst the members
Losses too must be shared
Franchises
Many charity-based business organizations are run as ‘not for profit’ operations
They typically receive donations or funds from groups or government
Any financial surplus is ploughed back into the business
The organization does not aim to generate profits
A business owned and managed by one individual; the business and the owner are .one and the same in
the eyes of the law.
Sole Proprietorship
Advantages
❑Simple to create
❑Profit incentive
❑Total decision-making
❑Easy to discontinue
Sole Proprietorship
Disadvantages
❑Feelings of isolation
Partnership
An association of two or more people who co-own a business for the purpose of making a profit Formed
through a partnership agreement
Partnership
Advantages
❑Easy to establish
❑Complementary skills
❑Division of profits
❑Flexibility
❑Taxation
Partnership
Disadvantages
❑Lack of continuity
Special Partnerships
Limited partnership-composed of at least one general partner and at least one limited partner
Limited liability partnership-a special type of limited partnership, in which all partners are
limited partners
Master limited partnership-a partnership whose shares are traded on stock exchanges, just like
corporations
Corporations
A separate legal entity apart from its owners which receives the right to exist from the state in which it is
incorporated
❑Domestic
❑Foreign
❑Alien
❑Publicly held
❑Closely held
Corporations
Certificate of Incorporation
❑Name
❑Statement of purpose
❑Time horizon
❑Place of business
Corporations
Advantages
❑Ability to continue
Indefinitely
❑Transferable ownership
Corporations
Disadvantages
❑Double taxation
A relatively new form of ownership that, like an S corporation, is a cross between a partnership and a
corporation; it is not subject to many of the restrictions imposed on S corporations;
Limited liability
Continuity of life
Centralized management