• Private Sector and Public Sector - 私营部门和公共部门

• Sole Trader - 个体经营• Partnerships - 合作伙伴• Limited Companies - 企业• Cooperatives - 合作社

Types of Organizations - 组织类型

Learning Outcome• Learn different types of organizations and

know their main features.

• Explain the advantages and disadvantages of each type of organization identified.

• Understand how Private and Public Sectors 扇形 are different.

The Private and Public Sectors of the Economy

• The Private Sector 私营部门 are businesses owned and controlled by individuals or groups of individuals. In every country, most business activity is in the private sector.

• The Public Sector 公共部门 are Organizations that are controlled by the government.

These usually include:• Health and education services • Defense

Public Sector Organizations

The Public Sector is made up or organizations which are owned and controlled by central or local government. They are funded by government and in some cases profit.

Public Sector businesses still have important roles to play in certain areas of business activity.

The Public Sector is made up or organizations which are owned and controlled by central or local government. They are funded and managed by the government.

The main aim is to work in the Interest of Public. Basic needs like Electricity, water and railways

transport

Public Corporations/ State Owned Enterprise

The Private Sector

Private SectorBusinesses

SoleTrader

PartnershipLimited

CompaniesCooperatives

PrivateLTD

PublicLTD

Limited Liability 有限责任– What does it mean?

It is about who is responsible for the debts of the business:

• Owners can be held responsible for ALL of the debts of the firm

The Sole Trader个体经营This is the most common type of business

organization. One person provides the finances and in return, has full control of the business and is able to keep all the profits.

Characteristics 特色 of The Sole Trader

• One owner• Owns the business• Makes all the decisions• Is responsible for all debts

(unlimited liability) 无限责任

The Sole TraderAdvantages

• Easy to set up, few legal requirements.

• Owner is the boss

• Owner keeps all profits.

• Able to have close personal relationships with staff 员工 and customers.

The Sole TraderDisadvantages

• Has full responsibility for managing business

• Long hours

• Difficult to raise additional capital (money).

• The owner has Unlimited Liability to repay any business

debts

Partnership

Partnerships are agreements between two or more people to carry on a business together, usually with a view of making a profit.

Partnership

Advantages

• Partnerships are easy to set up

• Partners can bring new skills and ideas

• Partners can invest new capital to expand the business

Disadvantages

• Partners can disagree

• Profits are shared.

• Partners have unlimited liability

Private Limited Company

Public Limited Company

Limited availability of finance

Can raise a huge amount of finance

Have Limited liabilityHave a legal personality

Capital is divided into sharesCannot sell to the general public

Can sell to the general public

Business continues in the event of deathShareholder/s is the director/s to run the business

Shareholders elect the board to directors to run the business

CooperativesOrganizations that are owned by their workers, such

as a farming cooperative 养殖合作社 .

Features

• All members can help run the business, sharing the work, responsibilities and decision making.

• All members have one vote.

• They share their money to buy equipment, and share the decision making, and profit.

Cooperatives

Organizations that are owned by their workers, such as a farming cooperative

Advantages Disadvantage

Everybody is equal It is difficult to raise money

Workers get to keep the profits

Workers may make bad decisions because they have little business experience

The ownership, control and finance of different firms

Sole Trader

Partnership Private limited company

Public limited company

Cooperative

Ownership Owned by its members

Control Owner

Source of finance

Public sales of stock

Who gets the profits

Profits shared by members

Review Questions

If a business owner has unlimited liability, this means:

A. The business cannot go bankrupt

B. The owner must meet all of his debts

C. The business has sold shares

D. The business is only small

Review Questions

If a business owner has unlimited liability, this means:

A. The business cannot go bankrupt

B. The owner must meet all of their debts

C. The business has sold shares

D. The business is only small

Review Questions

A furniture maker produces expensive hand-made pieces of wooden furniture. In which type of business organization is the furniture maker likely to work?A. A private limited company

B. A cooperative

C. A sole trader

D. A public limited company

Review Questions

A furniture maker produces expensive hand-made pieces of wooden furniture. In which type of business organization is the furniture maker likely to work?A. A private limited company

B. A cooperative

C. A sole trader

D. A public limited company

Review Questions

Which of the following is not a private sector business organization?

A. Public Limited Company

B. Partnership

C. Public Hospital

D. Cooperative

Review Questions

Which of the following is not a private sector business organization?

A. Public Limited Company

B. Partnership

C. Public Hospital

D. Cooperative

Resources to help you

• http://open.163.com

• http://v.163.com/special/Khan/microeconomics.html

• Review video with Chinese