1. Types of Business
Different businesses attempt to do different things, these businesses fall into 3 main types: 
Private
Public
Voluntary/Third sector
(Known as the Sectors of Economy)

2. Private Sector The following businesses are in the private sector:
Ownership
Owned by one or more private owners who have invested their own money (CAPITAL) in them
Purpose
Started in order to provide goods or services
Survival
In order to survive, a private business must earn more than it spends (make a profit)
Research Task
The following businesses are in the private sector:

3. Basic Definition Sole Trader Business owned by one person
Can employ other people but run by one person
Task 1

4. Partnership Business owned by 2–20 people
Requires a Deed of Partnership (Partnership Agreement)
What is this?
Rules of the business: how it is run, share of profits, partner responsibilities
Homework Task

5. Private Limited Company (Ltd)
Owned by shareholders
Unable to buy shares unless you are invited to invest in the company
Have limited liability – only lose the money you invested if the company fails
Handout on advantages and disadvantages
Task 3

6. Franchise
Franchise – the permission given by one business to another to sell goods or services using its name
One firm (franchisee) pays for the right to run under the name of another (franchisor)
Task 2

7. Public Sector
Ownership
Funded by government (central and local) and tends to supply public services rather than produce goods. Funded through taxation
Purpose
The public sector provides a large range of services, for example: Central Government – national health, police, defence. Local Government – education, libraries, roads

8. Public Corporations – owned and run by state on behalf of people
Public Corporations – owned and run by state on behalf of people. Nationalised industries. Many have been privatised!
Central Government Organisations – National services such as Treasury, Defence, and Health
Local Authorities – provide services like refuse collection, financed by council tax.
Task 4 and 5

9. Voluntary/Third Sector
Ownership
These are not owned by any individual people. However, someone will be responsible for ensuring that it sets targets and budgets and does what it was set up to do.
Purpose
In most instances they try to help particular types of people eg guide dogs for the blind, Oxfam, etc.
Survival
In order to survive they normally must at least break even (ie spend no more than they take in through fundraising, grants, donations etc.)

10. Voluntary Organisations – Run and staffed by volunteers.
Charities – Government regulates activities and keeps a register of charities. They are exempt from some taxes.
Voluntary Organisations – Run and staffed by volunteers.
Task 6

11. Social Enterprise (These can exist in all sectors)
Businesses which exist to address social or environmental need, rather than maximising profit for shareholders or owners
Co-operatives
Credit unions
Housing associations
Charities
Community businesses
Task 7