Mindblown: a blog about philosophy.

Public limited company These are the most common form of legal organization for really large businesses. They have all the advantages of a private company plus the right to advertise their shares for sale and have them quoted in the stock exchange. They can raise very large sums of public issues of shares. This flexibility…

Private limited companies Usually shares are owned by original sole trader. Shareholders may only sell their shares with the agreement of the other shareholders. Restrictions can be made on sales of shares, not allowed to advertise its share. Smaller than public limited companies. Advantages Limited liability Continuity Separate legal personality Original owner can take control…

Partnerships Agreements between two or more people to carry on a business togethe for profit. Groups must be chosen carefully. Deed of partnership should be made: agreement on issues such as voting rights, distribution of profits, management. Mostly common in law and accounting. Advantages Specialization in different areas Shared decision making Additional capital, more finance…

Sole trader One person provides the permanent finance and in return, has full control of the business and is able to keep all of the profits. Advantages No legal formalities, easy to set up Complete control Keeps all the profits Chooses time and pattern of work Close relation with the employees Privacy Business is based…

Private sector Businesses owned and controlled by individuals or groups. These goods are provided in the consumer markets.

Public sector These are the organizations and firms owned and controlled by central/local government. Mostly important goods and services are provided by the state. Eg. Education, defence, public law and order

Changes in business activity The importance of each sector in an economy changes overtime. Industrialization is the growing importance of secondary sector manufacturing industries in developing countries Benefits Increase in GDP and higher standadrd of living Increase in outputs, more exports and less imports Expansion of manufacturing business means more jobs Expanding and profitable firms…

Three sectors of business Primary sector They are directly to the natural resources. They are engaged in farming, fishing, oil extraction, mining. Secondary sector Those firms that manufacture and process products from natural resources, eg constructions, clothes making, manufacturer of consumer and industrial goods, rice mills Tertiary sector Firms that provide services to consumers and…

Capital goods These are physical goods that are used by industry to aid in production and other goods and services. Eg machines and commercial vehicles.

Consumer services These are non tangible products sold to general public. They include hotel accommodation, insurance and services, teaching